16/4/06 (The Star)  - BURSA Malaysia Bhd is currently reviewing the policy on the sale of its crude palm oil (CPO) futures daily settlement price licences to interested foreign-based futures exchanges.

Chief executive officer Yusli Mohamed Yusoff said the bourse would undertake a series of intensive consultation with industry players and stakeholders.

“We will make an official statement soon,” he said in a brief e-mail reply last Friday.

This was in response to StarBiz’s query on the plight of the local brokerage industry and the fate of Malaysia's CPO futures with the setting up of the Joint Asian Derivatives Exchange (JADE) in Singapore.

Yusli was recently quoted as saying that despite ongoing discussions with foreign exchanges, Bursa would ensure that the country's CPO futures contract was not compromised.

He expects further development with foreign exchanges keen to set up CPO futures contract in their respective countries to cement the credibility of Malaysia's CPO futures market as the leading pricing benchmark globally.

So far this year, Bursa has signed memoranda of understanding with three foreign exchanges, namely Singapore-based Joint Asian Derivatives Pte Ltd, Multi Commodity Exchange of India Ltd and China-based Dalian Commodity Exchange on the CPO futures daily settlement price licensing agreements. 

On the local front, the CPO futures is one of the most actively traded derivatives contracts offered by Bursa Malaysia, representing almost 50% of its total derivatives business.

Today, it remains the most successful commodity futures contract ever launched in Malaysia. 

The main users of the market include plantations, millers, refiners, dealers and brokers. At present, speculative interest contributes 65% to the total turnover. 

Average volume in lots, over the last five years amounted to 500,000 contracts, representing an underlying physical turnover of 12.5 million tonnes of CPO. Open interest averaged 8,000 lots per day over the same period.