Trade volumes were at their heaviest since the beginning of the week, touching 6,099 lots of 25 tonnes each, against Wednesday's tally of 4,242 lots.
The benchmark third-month January crude palm oil contract on Bursa Malaysia Derivatives closed up 17 ringgit, or 1.2 percent, at 1,435 ringgit ($380.64) a tonne. Its high for the day was 1,438 ringgit.
Other traded months ended up 14-17 ringgit.
The market can easily see 6,000 lots or more on a busy day, but players have been cautious on taking major positions this week because of holidays next week.
The market will be closed on Tuesday, Thursday and Friday next week for the Hindu Diwali and Eid-ul-Fitr festivals.
Dealers attributed Thursday's hefty trade to speculation that India could resort to another adjustment of edible oils duties, this time favouring palm.
India buys nearly half its annual needs of around 11 million tonnes in the form of palm oils from Malaysia and Indonesia and soft oils from Argentina and Brazil. It fixes base prices to prevent importers from under-invoicing the products and paying lower taxes.
India last revised base prices on October 15 when it raised taxes for all palm and soya oils. There was no announcement on Thursday of any changes to those prices.
"But we're hearing rumours that the base prices of some palm products could be revised down by as much as 30 percent," said a trader in Kuala Lumpur. "That's what's got people excited here."
But dealers in India said they expected a cut in customs duty, rather than base prices.
There was speculation that the government could reduce the customs duty on crude palm oil to 65 percent from 80 percent, dealers in New Delhi said.
They said it was not possible to cut base prices on palm oils by 30 percent because global prices had not fallen as much since October 15.
While base prices were the reference point for calculating taxes, the actual quantam payable was determined by the percentage of customs duty levied on each product, they said.
"People are confusing between customs duties and base prices," said a trade official in New Delhi.
December soyaoil on the Chicago Board of Trade settled up 0.08 cent at 23.61 cents a lb in Thursday's electronic trade, conducted during Asian business hours. It had fallen 0.25 cent at Wednesday's close in Chicago.
Soya and palm compete for exports and their prices often move in step.
Soyaoil prices have been volatile lately as the commodity is increasingly viewed as an energy product for biofuel, rather than as a traditional source of food. For most of this week, electronic trade of CBOT soyaoil has gone in the opposite direction to the previous day's close in Chicago.
Prices of physical Malaysian crude palm oil were also up on Thursday, taking their cue from the futures market.
Offers for October delivery closed at 1,440 ringgit, against bids at 1,437.50. Offers/bids closed at 1,430/1,425 on Wednesday.
PALM OIL FUTURES
October (south): 1440.00
Open/High/Low: 1420/1438/1420
Previous close: 1430.00
PALM OIL PHYSICALS:
January (3rd month): 1435
Previous settlement: 1418 sellers' quote
FUTURES:
Benchmark January up 17 ringgit at 1,435 ringgit ($380.64) a tonne.
PHYSICALS: Offers for October up 10 ringgit at 1,440.