CPO futures' trading volume on Bursa Malaysia Derivatives hits all-time high

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KUALA LUMPUR (Oct 27): The total trading volume for crude palm oil futures contract (FCPO) on Bursa Malaysia Derivatives (BMD) has reached an all-time high of 12.0 million lots, surpassing the previous record of 11.91 million lots in 2017.   

On a year-to-date basis, this represented a 41% increase from 8.49 million lots registered between January and October 2019, said Bursa Malaysia in a statement. 

Bursa noted that as of today, 300 million tonnes of crude palm oil was traded via the exchange, which is approximately 20 times of Malaysia production as at September 2020.   

The increase in volume, it said, was primarily due to the greater use of FCPO as a hedging tool against the price volatility caused by the Covid-19 pandemic.  

"Price volatility is no stranger to the market, yet this pandemic outbreak has shaken the commodities sector,” the statement quoted Bursa chairman Tan Sri Abdul Wahid Omar as saying in his welcome address at the opening of the Virtual Palm & Lauric Oils Price Outlook Conference & Exhibition 2020 today. 

“Nonetheless, BMD remains committed to strengthening the palm complex suite to cater to the demand of market participants and provide a reliable hedging and arbitrage instrument against price volatility in the palm oil industry,” he added.  
 
BMD, a subsidiary of Bursa Malaysia, provides, operates and maintains equity, interest rates, bond, agricultural commodity (crude palm oil and palm kernel), metal commodities (gold and tin) futures and options market trading and settlement services. 

S Kanagaraju