Kuala Lumpur: Bursa Malaysia Derivatives achieved a record high of 22.75 million contracts traded across all products in 2024, marking a 19 percent increase from 19.11 million contracts in 2022, according to Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar. Abdul Wahid highlighted the significance of the crude palm oil futures (FCPO) contract in managing market volatility amid fluctuating CPO prices. He emphasized that for over 40 years, it has served as the globally referenced benchmark for CPO pricing and a preferred risk management tool among edible oil traders worldwide.
According to BERNAMA News Agency, CPO production rose by over four percent to 19.3 million tonnes. The average CPO price increased by 9.7 percent to RM4,179.50 per tonne, while exports of palm oil and other palm-based products grew by 8.9 percent compared to 2023, reaching almost 27 million tonnes in 2024. Abdul Wahid mentioned that Malaysia's palm oil industry is set for further growth, supported by improving labour conditions and strong export demand. He noted that the agriculture sector is projected to expand by 1.9 percent, driven by biodiesel mandates in different countries, rising global demand for edible oils, and improved palm oil price forecasts.
However, Abdul Wahid also pointed out that increased competition from alternative vegetable oils, reduced demand from major importers such as China and India, and unpredictable weather patterns continue to affect trade dynamics. He stressed the importance of market participants remaining vigilant. Last year, Bursa Malaysia Derivatives expanded its offerings by introducing two new contracts: the Bursa Malaysia DCE Soybean Oil Futures (FSOY) and the USD Used Cooking Oil FOB Straits (Platts) Futures (FUCO).
Abdul Wahid reported that the FSOY contract, launched in March 2024, gained significant traction among traders, with open interest peaking at 274 in August and total trading volume reaching 79,559 contracts by the end of December 2024. He noted that the FUCO contract, launched in December 2024, is timely as demand for used cooking oil is expected to grow, driven by increasing biodiesel mandates worldwide. He stated that the FUCO contracts are more than just trading instruments, aligning with the broader goal of advancing sustainability in physical markets and reinforcing Bursa Malaysia's intent to create long-term value for stakeholders.