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Bursa Malaysia Berhad has entered into a licensing agreement to grant the MCX (Multi Commodity Exchange of India Ltd) an exclusive and non-transferable license to use Bursa Malaysia’s Derivatives Palm Oil Price in India. This initiative is a result of a Memorandum of Understanding (MOU) between the two exchanges signed on 30 March 2006.
Through the licensing agreement, Bursa Malaysia will permit MCX to use the former’s Derivatives Palm Oil Price as the basis for settling MCX’s palm oil derivatives contracts and as the reference in connection with the creation, marketing, trading, clearing and settlement of such contracts on MCX.
“This is a significant step for both the exchange and our palm oil derivatives market. First, it spells the further expansion of Bursa Malaysia’s regional alliances. Second, it solidifies our position as the benchmark of global derivatives palm oil pricing,” said Yusli Mohamed Yusoff, Chief Executive Officer, Bursa Malaysia Berhad.
“The agreement with Bursa Malaysia Berhad will provide a benchmark price reference for risk management to the palm oil sector of India, allowing Indian palm oil producers, users and investors access to globally aligned prices and trading practises within their home country, in local currency, local time and with safeguard of counterparty risk,” said Mr. Jignesh Shah, Managing Director and CEO, MCX.
Bursa Malaysia operates the world’s largest derivative exchange dealing in palm oil contracts. The Crude Palm Oil Futures contract launched in October 1980 is one of the most actively traded derivatives contract offered by Bursa Malaysia, representing almost 50% of Bursa Malaysia’s derivatives business.
MCX, the market leader in India is also fast emerging as a global level Exchange with major global alliances and large volume in globally traded commodities within energy, metals and agriculture sector. These alliances are benefiting Indian users to obtain global efficiencies at local cost and in local timing.
