Malaysia Reinforced Commodity Exchange for Indonesia Planned to Establish CPO Price

Malaysia Reinforced Commodity Exchange for Indonesia Planned to Establish CPO Price

InfoSAWIT, KUALA LUMPUR – The officials of Malaysia and its partners from eastern and western regions tried to reinforce price establishment and the roles of Bursa Malaysia Derivatives (BMD) to decide crude palm oil (CPO) price.

Malaysian officials and its partners spoke in defensive tones during Palm Oil Conference and Lauric 2023 knowing that the biggest palm oil producer in the world, Indonesia would immediately decide its reference price.

But BMD underlined its major roles as the global center to determine CPO price. BMD partners in the globe which are the major financial derivative exchange operators from USA and China – which CME Group and Dalian Commodity Exchange – emphasized their commitment to BMD.

The two derivative exchange operators in the globe specifically acknowledged Malaysia in this sector. They would keep collaborating with Malaysia in this sector.

The Government of Malaysia through Ministry in Commodity and Plantation, in the event also focused on CPO reference price from Malaysia to the globe and focused on the main sustainability in this sector.

In his speech at the inauguration of International Palm Oil Conference 2023, Chairman of BMD, Tan Sri Abdul Wahid Omar focused on new products with the main features and what the exchange achieved in this sector.

“For the first time in history, CPO hit the record at RM 8.000 per ton in March 2022, before it got cheaper again to be RM 3.400 in September 2922,” he said, as quoted from The Star.

He also mentioned, CPO reference price contract (FCPO), BMD could hit the record trade volume up to 16,2 million contract or equal to 405 million tons, surpassed the 2021 business that reached 390 million tons. “The numbers were more than five time - production,” Abdul Wahid said.

He also told, new innovative financial product would be update to get flexible financial in the future.

As the hub to determine CPO price globally, BMD keeps developing sustainable markets by improving ecosystem and escalate its products as the reliable value protected instrument to price volatility.

“For instance, we launched Alternative Delivery Procedure (ADP) in September 2022 for our main contracts, they are, FCPO, Crude Palm Oil Futures (FEPO) Malaysia Timur, and Crude Palm Kernel Oil Futures (FPKO),” he said. (T2)