KUALA LUMPUR, July 30: Malaysian crude palm oil futures rose 0.8 per cent on Wednesday, heading towards the key 3,000 ringgit level as investors flooded back into the market to take positions on expectations of surging Asian festival demand.

Palm oil, stricken in recent weeks by weakening crude oil prices and a massive stock build-up, wiped out all its gains for this year but has now ended its three-day losing streak.

The benchmark October contract on the Bursa Malaysia Derivatives Exchange settled up 23 ringgit at 2,992 ringgit ($917) after going as low as 2,909 ringgit.

Asian countries appear to be buying in a big way. China needs to buy after Olympics in August wears out the reserves while Pakistan and Middle East keep on making their purchases, said a dealer with a local commodities broker.

Other traded months were 4 ringgit and 33 ringgit higher, except for the spot month which fell 12 ringgit. Overall volume stood at 9,590 lots of 25 tons each.

Traders said shipments of the vegetable oil in July are expected to jump about 26 per cent to 1.37 million tons. Cargo Surveyors Intertek Testing Services and Societe Generale de Surveillance will unveil estimates for July on Thursday.

Overseas demand is starting to trickle in, with buyers in China, India and Middle East nations usually stocking up at least two months before the Asian festival season begins in early September with the Muslim fasting month of Ramazan.

But the Southeast Asian nation, along with Indonesia, is undergoing a high production cycle in recent months with analysts predicting bumper harvests till September.

Malaysia’s July palm oil stocks are likely to slip nearly 1 per cent from record levels from a month before as surging shipments outstripped modest growth in output, a Reuters poll showed on Wednesday.

—Reuters