KUALA LUMPUR, March 3 (Bernama) -- Bursa Malaysia will introduce a CommonTrading Platform (CTP) for derivatives trading in the second quarter ofthis year to spur further growth of the local crude palm oil futuresmarket, its chairman, Tun Mohamed Dzaiddin Abdullah, Thursday.

The CTP would support continuous trading, improve order execution andgenerally enhance operational efficiency, he said.

Dzaiddin said the migration to an electronic trading platform from an openoutcry system in 2001 had resulted in a more efficient marketplace.

He also said buyers and sellers of palm oil and palm-based products neededeffective hedging instruments as a result of the high volatility of crudepalm oil prices.

He said Bursa Malaysia offered effective hedging instruments for buyersand sellers of palm oil and palm based products to effectively manageprice risks in the highly-competitive commodity markets.

"Bursa Malaysia, a consolidated, demutualised exchange offeringdiversified investments in equities, derivatives and offshore instrumentsprovides such risk management tools," he said.

Bursa Malaysia Derivatives currently offers trading in Crude Palm OilFutures Contract (FCPO), which was launched in 1980 and the Crude PalmKernel Oil Contract launched in 2004.

The FCPO is the 10th largest commodity based derivative contract tradedworldwide.

"These futures contracts have been carefully designed for the oils andfats industry to hedge against adverse price changes. The Crude Palm OilFutures market is the preferred benchmark for the pricing of the palm oiland its products worldwide.

"This is evident in the growth of the market over the last few years withturnover averaging more than 5,500 lots in 2004, representing a notionalvalue of approximately 140,000 metric tons of crude palm oil traded perday," he said.

Mohamed Dzaiddin said open interest had also grown, averaging 30,000 lotsin 2004.

-- BERNAMA