Bursa, CME still discussing futures

BURSA Malaysia Bhd (1818) is still in talks with the Chicago Mercantile Exchange (CME), the world's largest derivatives exchange, to eventually have palm oil futures traded on the Chicago Board of Trade (CBOT)."Discussions are ongoing," Bursa Malaysia chief executive officer Datuk Yusli Mohamed Yusoff said.

CME Group, which clocks in a daily trading volume of around nine million contracts, consists of the Chicago Mercantile Exchange and the Chicago Board of Trade (CBOT). It is the world's largest derivatives exchange for grains, livestock, oilseeds, dairy and timber.

If Bursa Malaysia's palm oil futures are traded in Chicago, it will boost palm oil's popularity as a reliable and flexible hedging tool.Malaysia is the world's biggest palm oil exporter and Kuala Lumpur, the biggest futures market for the commodity.

Malaysia has two palm products, namely the very popular crude palm oil futures (FCPO) and the not-so-popular US dollar palm oil futures (FUPO).Plantation Industries and Commodities Minister Datuk Peter Chin, in his keynote address, noted that the derivatives market saw trade of three million FCPO contracts last year, up 8 per cent from 2.8 million in 2007.Bursa Malaysia is hopeful that growth in the derivatives market will help cushion the blow of a slower equities market this year.It wants to work with CME to grow its derivatives business further.