Executive Chairman of MDEX, Encik Abdul Jabbar Abdul Majid said the launch of FPKO is timely given the positive uptrend of the existing Crude Palm Oil Futures or FCPO.
"The total volume of trade in FCPO grew by 60% as at market close on 19 February 2004 compared to 19 February 2003.
"In fact, FCPO recorded its highest volume on 21st October 2003, with 14,508 contracts. This is the highest gain for FCPO in 23 years since its inception in 1980.
"Thus, given this background, we are positive that FKPO will do just as well, insya allah," he said.
Abdul Jabbar was speaking at the launch of the FKPO, which was officiated by YB Dato' Seri Lim Keng Yaik, Minister of Primary Industries.
He added that the active trading in the derivatives market for commodities contracts is strongly backed by the continuing rapid growth and progress of the palm oil industry.
Malaysia is the world's largest producer of crude palm oil and palm kernel oil, producing 13.35 million tonnes and 1.64 million tonnes a year, respectively. Over the last 15 years, crude palm oil production has grown at an average of 7.1% whilst palm kernel oil production has grown at an average of 7 %, annually. Given the level of growth, to date, there are 22 Malaysian companies in palm kernel oil production whilst more than 10 companies, are producing basic oleochemicals. "With such an actively growing market, industry and market participants who have participated in FCPO are now ready to expand their participation in this new contract.
"The introduction of FKPO will enable participants to be in a better position to monitor, manage, and therefore control the pricing and marketing of their products more effectively," Abdul Jabbar said.
Market makers, who have taken the leading position to benefit from FKPO, include IOI Group Sdn Bhd, KL Kepong Sdn Bhd, Kuok Oil and Grains Sdn Bhd and Wilmar Trading Pte Ltd.
"Their exemplary commitment should be followed by other market participants," Abdul Jabbar said.
