.jpg)
CME Group, the world's leading and most diverse derivatives marketplace, today announced the first USD Malaysian Crude Palm Oil Calendar Swaps were cleared on 21 June 2013, through CME ClearPort. The trade was between Gunvor Group and Louis Dreyfus Commodities, and was brokered by Starsupply (SG) Pte Ltd, part of the SCB Group.
Based on prices from Bursa Malaysia Derivatives' ("BMD") Crude Palm Oil futures contract ("FCPO"), the USD Malaysian Crude Palm Oil Calendar Swap fills a niche area for customers who are looking both to trade in the far forward months, and for these trades to be universally cleared by a central counterparty as opposed to bilaterally between parties.
James McKay, a broker at Starsupply Singapore said, "It's great to finally have a cleared product for USD palm oil. It has traded OTC bi-laterally for quite some time, but with an increasingly prohibitive credit and regulatory environment, we think there is a demand for a standardized, centrally cleared USD palm contract that does not require financing or ISDA agreements to trade. Starsupply has been involved in starting a number of OTC markets and believe that this product has the key elements required to grow into a functioning OTC product."
"These new calendar swaps provide an additional tool for customers in Singapore, Malaysia and around the world, to manage counterparty risk in their underlying cash positions in crude palm oil. We are pleased to see the first trade of these palm oil swaps, and look forward to continue working together with our partner Bursa Malaysia Derivatives to further build new tools for the palm oil industry," said Nelson Low, Executive Director, Commodity Products, CME Group. "Bids and offers are readily available from interdealer brokers specializing in palm oil, and trades can be submitted for clearing through CME ClearPort."
