Bursa Malaysia Derivatives to launch revamped FPKO contract

KUALA LUMPUR: Bursa Malaysia Derivatives Bhd (BMD) will launch the revamped Crude Palm Kernel Oil Futures (FPKO) contract, implementing several enhancements to the contract specifications to meet the evolving needs of the industry.

The revamped FPKO contract will be made available to traders on March 8, 2021.

BMD chief executive officer Samuel Ho said the enhancements was made to provide a better contractbased on the industry's needs and create a positive impact on the development of the Crude Palm Oil Kernel Oil (CPKO) market.

"The revised FPKO will cater to industry players' demand to hedge against the risk of adverse price movement in the lauric oil market.

"This could also provide new trading opportunities for other market participants and adds diversity to their existing instruments," he said in a statement today.

The palm kernel physical market has seen considerable growth over the years and has established itself as one of the region's most important commodities.

In addition, 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 new enhancements aim to create an effective hedging instrument against the physical market and provide an alternative instrument for local and international participants to trade.

Improvements to the contract have been applied across five main areas, which include contract grade, delivery points, daily price limits, speculative position limits as well as imposing traceability document requirements. -- BERNAMA