Bursa Malaysia Derivatives Hits All-time High Of 22.75 Mln Contracts In 2024 -- Abdul Wahid

KUALA LUMPUR, Feb 25 (Bernama) -- Bursa Malaysia Derivatives recorded an all-time high of 22.75 million contracts traded across all products in 2024, up 19 per cent from 19.11 million contracts in 2022, said Bursa Malaysia Bhd chairman Tan Sri Abdul Wahid Omar.  

Abdul Wahid said Bursa Malaysia’s crude palm oil futures (FCPO) contract remains vital for managing market volatility amid fluctuating CPO prices.  

“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,” he said in his welcoming address at the 36th Palm and Lauric Oils Price Outlook Conference and Exhibition (POC2025) today.

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The Bursa Malaysia chairman said FCPO trading volume increased by 17 per cent to 18.95 million contracts in 2024 from 16.21 million in 2023, while monthly average daily contracts crossed 100,000 for the first time, hitting 106,385 contracts in October 2024.

According to the Malaysian Palm Oil Board’s (MPOB) full-year 2024 data, CPO production increased by over four per cent to 19.3 million tonnes; the average CPO price increased by 9.7 per cent to RM4,179.50 per tonne; and exports of palm oil and other palm-based products grew by 8.9 per cent compared to 2023, reaching almost 27 million tonnes in 2024.

Abdul Wahid said Malaysia’s palm oil industry is poised for further growth, supported by improving labour conditions and robust export demand. 

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“The agriculture sector, in particular, is projected to expand by 1.9 per cent driven by biodiesel mandates in various countries, rising global demand for edible oils, improved palm oil price forecasts, and better labour conditions,” he said.

However, Abdul Wahid emphasised that increased competition from alternative vegetable oils, subdued demand from major importers such as China and India, and unpredictable weather patterns continue to impact trade dynamics.

“It is therefore crucial for market participants to remain vigilant,” he said. 

Last year, Bursa Malaysia Derivatives expanded its offerings with the introduction of two new contracts, the Bursa Malaysia DCE Soybean Oil Futures (FSOY) and the USD Used Cooking Oil FOB Straits (Platts) Futures (FUCO).

Abdul Wahid said the FSOY contract, introduced in March 2024, has gained encouraging 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 said the FUCO contract, which was just launched in December 2024, is particularly timely, as demand for used cooking oil is poised to grow, driven by increasing biodiesel mandates worldwide.

“More than just a trading instrument, the FUCO contracts align with the broader goal of advancing sustainability in physical markets, aligning with the United Nations Sustainable Development Goal 7 on clean and affordable energy.

“It also reinforces Bursa Malaysia’s intent of creating long-term value for stakeholders and contributing to Malaysia’s sustainable development,” he said.

Abdul Wahid added that the exchange will continue strengthening its derivatives offerings as reliable hedging and arbitrage instruments and helping industry players confidently navigate challenges.

— BERNAMA