24/10/06 (The Star)  - BEIJING: China’s Dalian Commodity Exchange will not use the Malaysian palm oil prices as a benchmark for its planned palm oil futures contracts. 

The Dalian exchange last Friday said it was developing contracts for refined palm oil products that are different from Malaysian crude palm oil futures. Malaysian palm oil is the world's most actively-traded vegetable oil. 

China, the world's largest user of the tropical oil, is the biggest buyer of Malaysian palm oil.

“The process hasn't been going as quickly as we'd hoped,'' Raghbir Singh Bhart, Bursa Malaysia's head of global markets and chief representative, said at a conference in Beijing on Friday.

The two exchanges in April agreed to share information and work together on product research, including launching palm oil futures in China, Dalian said in an e-mail. 

Bursa Malaysia has been trying to raise the profile of its palm futures trading through working with other exchanges, and plans to turn it to a global benchmark. 

It reached an agreement with the Multi Commodity Exchange of India in August to offer the Malaysia prices as a benchmark for trading in Mumbai. 

Bursa Malaysia is under pressure after Singapore Exchange Ltd. and the Chicago Board of Trade formed a commodity futures venture, Joint Asian Derivatives Exchange, or JADE, which will offer palm oil futures by December. 

JADE's prices may become a benchmark, reducing Malaysia's dominance, Bhart said. 

“In this globalised world, you have to form alliances to compete,'' he said. 

“You can't close your eyes and pretend competition doesn't exist.'' – Bloomberg