Bursa Malaysia to launch revamped crude palm kernel futures

5 Mar 2021 | Rei Geyssens

The Bursa Malaysia Derivatives exchange (BMD) announced it will launch a revamped crude palm kernel oil futures (FPKO) contract that will be made available from next Monday, the exchange said on Friday.

The improvements to the contract have been applied to five areas encompassing contract grade, delivery points, daily price limits, speculative position limits, as well as imposing traceability document requirements, the exchange said.

The “necessary enhancement” will be implemented after several industry consultations “to provide a better contract based on the industry’s needs and create a positive impact on the development of the crude palm oil kernel oil (CPKO) market,” the exchange said in a statement on Friday.

“The revised FPKO will cater to industry players’ demand to hedge against the risk of adverse price movement in the lauric oil market,” Samuel Ho, Chief Executive Officer of BMD, said in the statement.

The Bursa said it is responding to the considerable growth over the years in the palm kernel physical market which has established itself as one of the region’s most important commodities.

“The FPKO Contract will serve as a tool for the lauric oil industry players to hedge their portfolio risk and enables transparent price discovery for the palm complex market players,” the exchange added. 

The contract will be made available to traders on Monday, March 8.