KUALA LUMPUR, Aug 10: Malaysian palm oil futures rebounded on Wednesday and snapped four straight sessions of losses as cautious investors said the market was oversold on growth and debt worries.

Oil led a rebound among commodities as investors went bargain hunting for riskier assets after the US Federal Reserve promised to extend near-zero interest rates for two more years.

The benchmark October crude palm oil contract on Bursa Malaysia Derivatives ended 0.6 per cent higher at 2,937 ringgit ($971.070) a ton.Overall traded volumes stood at 23,960 lots of 25 tons each, below the usual 25,000 lots.

Yesterday was down and oversold, while other markets have also rebounded back, said an Indonesia-based trader. People still need to eat ... and palm oil is still the cheapest (vegetable oil).

Like many other commodity markets, palm oil has been weighed down this week by concerns that a global economic slowdown were imminent after the US credit downgrade pressured financial markets.

On Tuesday, benchmark prices touched 2,917 ringgit, a level unseen since late-October last year.

Palm is following a strong rebound from the Dow Jones Index, also some kind of correction after the sharp plunge of the last few days, said a Kula Lumpur-based trader.

On the data front, cargo surveyor Intertek Testing Services said exports of Malaysian palm oil products for Aug 1-10 rose 48 per cent to 592,538 tons from 400,316 tons shipped during July 1-10.

Another cargo surveyor Societe Generale de Surveillance showed exports of palm oil during the same period of time jumped 53pc.

Industry regulator Malaysian Palm Oil Board said Malaysia's July palm oil stocks fell 2.8 per cent to 1,996,317 tons from a revised 2,053,382 tons in June.

A top official from Malaysia’s IJM plantations said Southeast Asian palm oil production will not be as high as expected this year as the impact of the El Nino weather condition in 2010 may weaken yields.

Also, oil palm plantation workers in the region that produced over 90 per cent of global palm oil supplies are expected to take a long break during Muslim fasting month in August that is followed by Eid -Ul-fitr festival.

Brent crude climbed above $106 a barrel, lifting other vegetable oils in Asian hours.—Reuters