26/7/06 (NSTP)  - BEIJING: Palm oil-based biodiesel futures could become the latest derivatives product on Bursa Malaysia Derivatives Bhd and companies which own and operate biodiesel plants could also seek to list their shares on the Mesdaq market.
Bursa Malaysia Derivatives is now the world's biggest market place in terms of volume for crude palm oil (CPO) futures (5,000 contracts daily) and palm kernel oil contracts.
Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said the possibility for investors to trade methyl esther (palm oil-based biodiesel) futures is there but first, the fuel must be developed into a stronger commodity worldwide.
"Palm oil-based biodiesel must first gather volume and popularity and then we can look at forward selling and other aspects," Chin told Business Times.
Chin is leading a 20-member palm oil trade mission which ends on Friday.
He had earlier visited China's National Centre for Biotechnology Development.
Earlier this year, there was also a suggestion to list a timber-based product on the exchange which is widely believed to be rubberwood. However, no proposal has been made yet by the authorities.
Palm oil-based biodiesel received a boost last week when Malaysia and Indonesia, which are the world's top two producers, each agreed to set aside 6 million tonnes of their respective production to be converted into biodiesel. Both countries each produce some 15 million tonnes last year.
Biodiesel blended with various vegetable oils such as rapeseed and soyabean is fast gaining popularity globally as an alternative to expensive fossil fuel.
Meanwhile, Chin said the Malaysian Palm Oil Board, which is a unit under his charge, is expected to forge an alliance with China's National Centre for Biotechnology Development (a unit of China's Science and Technology Ministry) to jointly undertake research and development activities to concoct enzyme-based biodiesel.
The alliance is expected to be signed in Kuala Lumpur.