Bursa Malaysia Derivatives Achieves New Record-High Open Interest, Indicating Positive Crude Palm Oil Market Sentiments

Bursa Malaysia Derivatives Berhad (“Bursa Malaysia Derivatives” or the “Exchange”) reported an all-time high in daily open interest for its benchmark price-setting Crude Palm Oil Futures (“FCPO”) contract, demonstrating the strength behind bullish sentiment in the crude palm oil market. Open interest for FCPO reached a record breaking 299,190 contracts on 14 March 2024, surpassing the previous high of 287,859 on 10 September 2014. This coincides with a new peak in combined open interest for all products, totalling 360,132 contracts, exceeding the previous highest of 346,403 contracts on 26 February 2020. Open interest has remained at a steady high throughout the week; Yesterday’s closing was at 291,127 contracts for FCPO and 352,054 contracts for all products combined.
 
Open interest, which is the total number of outstanding futures or options contracts at the end of a trading day, 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.
 
Adding to the positive momentum, Malaysian FCPO witnessed their highest closing in over a year on 13 March 2024. The benchmark third-month contract strengthened by RM66, or 1.6%, to close at RM4,195 - its highest closing since 9 March 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.
 
Mohd Saleem Kader Bakas, Director of Bursa Malaysia Derivatives, remarked, “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.”
 
The introduction of the Bursa Malaysia DCE Soybean Oil Futures (“FSOY”) contract earlier this week, through a collaboration with one of the largest commodity exchanges in China, Dalian Commodity Exchange (“DCE”), represents a significant advancement in diversifying Bursa Malaysia Derivatives’ commodity offerings. This launch not only signifies the Exchange’s first venture into non-palm-based edible oil futures but also aligns with its strategic goal to expand its commodities portfolio. By broadening its range of derivatives products, Bursa Malaysia Derivatives reinforces its standing as a multi-commodity global trading hub, catering to a wide array of market needs.
 
For more information on Bursa Malaysia Derivatives’ offerings, please visit https://www.bursamalaysia.com.