Bursa Malaysia Derivatives reports all-time high daily open interest for crude palm oil futures
21/03/2024 (New Straits Times) Kuala Lumpur - Bursa Malaysia Derivatives Bhd has reported an all-time high in daily open interest for its benchmark price-setting crude palm oil futures (FCPO) contract in March.
Open interest for FCPO reached a record breaking 299,190 contracts on March 14, surpassing the previous high of 287,859 on Sept 10, 2014.
This coincided with a new peak in combined open interest for all products, totalling 360,132 contracts, exceeding the previous highest of 346,403 contracts on February 26, 2020.
Open interest is the total number of outstanding futures or options contracts at the end of a trading day.
In a statement, the exchange said open interest acts as a vital gauge for market sentiment and the momentum behind price trends.
"The rising open interest in FCPO since mid-February 2024 reflects increased market participation, in part driven by the recent positive outlook on crude palm oil (CPO) prices.
"This sentiment was reinforced by industry insights and analyses presented earlier this month at Bursa Malaysia's 35th Palm & Lauric Oils Price Outlook Conference & Exhibition (POC2024), which serves as a key platform for decision makers and thought leaders in the global edible oils industry," it noted.
Malaysia FCPO witnessed their highest closing in over a year on March 13.
The benchmark third-month contract strengthened by RM66, or 1.6 per cent, to close at RM4,195 - its highest closing since March 9, 2023.
This performance, buoyed by the strength in rival edible oils and firmer crude oil prices, highlights the interconnected dynamics of the palm oil market.
"As the landscape for edible oil market evolves, our record-breaking open interest underscores the value our clients place in Bursa Malaysia Derivatives' platform.
"This surge, particularly in the FCPO market, amidst the dynamic shifts post-pandemic and in geopolitical landscapes, demonstrates our market's capability to adapt and serve as a critical hub for effective price risk management.
"It not only reflects our market's depth and liquidity but also affirms Malaysia's strategic position as the global trading hub for edible oils, aligning with our aim to cater to the complex needs of international participants in these changing times," said Bursa Malaysia Derivatives director Mohd Saleem Kader Bakas.