KUALA LUMPUR: Bursa Malaysia Bhd plans to launch US dollar-denominated crude palm oil futures contracts in September, chief executive officer Datuk Yusli Mohamed Yusoff said.
“We hope to launch the contracts later this year, hopefully in the next two or three months,” he said at the sidelines of the Securities Industry Development Corp’s incorporation and the unveiling of the Industry Transformation Initiative programme yesterday.
“Although the market is volatile, things are looking good as the fundamentals here are still intact.
“There is huge interest in crude palm oil and we are quite hopeful that it will complement our ringgit contract, especially for traders who wish to trade in US dollars.
“For international investors, this should be more appealing,” he added.
Reuters noted that Malaysia’s palm oil futures, which hit a historic high last month, were increasingly attracting attention from global investors, including hedge funds.
In a report, it quoted a trader as saying that Bursa could now be a “gateway” for international inventors who wanted to migrate from ringgit-backed palm oil futures to dollar-denominated ones.
Bursa Malaysia is now fine-tuning the details of the FCPO trading, which is seen by market observers as an effort to strengthen Malaysia’s position as the market leader in the palm oil market after a joint venture between the Chicago Board of Trade and the Singapore Exchange launched a similar contract last month on the Joint Asian Derivatives Exchange.
Malaysia is the world’s second-largest palm oil producer after Indonesia.
Rising demand from China and India, coupled with the government’s move to mandate a five percent palm-oil based biofuel blend for all diesel have sent Malaysia’s crude palm oil prices soaring over the past year.
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