PALMOILMAGAZINE, KUALA LUMPUR – The Malaysia Derivatives Exchange has unveiled its strategy to boost trade by introducing a soybean oil exchange in the first quarter of the upcoming year.
The aim is to establish a more comprehensive protective solution for stakeholders in the vegetable oil industry.
Mohd Saleem, the Director of the Derivatives Market at the Malaysia Derivatives Exchange, stated that the plan is currently in development, including the formulation of contract specifications, and it is expected to be fully prepared before the initial launch in early 2024.
“There would be more trading, such as, crude palm oil (CPO) and soyoil. This would be synergizing protection values in one roof (management),” he said, as Palmoilmagazine.com quoted from The Edge Market.
Also Read : CPO Price at Malaysia Derivatives Exchange Rises Amidst Soyoil Price
The plan is also about to create efficiency and sustainability in vegetable oil trade because CPO, soyoil, sunflower, and canola have connection one to another.
By having soyoil exchange contract, Malaysia Derivatives exchange hoped to deliver many choices for stakeholders that want to have protection value on the risks that they are facing about price fluctuation in the markets globally.
Prior Chicago Mercantile Exchange (CME Group) and Chicago Board of Trade (CBOT) led soyoil exchange contract. But by having the ambitions plan, Malaysia Derivatives Exchange hoped to get soyoil producer and traders’ attention in the world. There would be challenges to face as same as having the big chances.
Chief Executive of Sunvin Group, consultant and broker company in Mumbai, Sandeep Bajoria said that soyoil contract at CBOT and Dalian Commodity Exchange is in liquid. That is why Malaysia Derivatives Exchange needs to get smart actions to get trade volume significantly.
“Soyoil contract at CBOT and Dalian Commodity Exchange is very liquid. It is not easy for Malaysia Derivatives Exchange to get big volume,” he said.
This would be significant after India stops palm oil and soyoil exchange trade in December 2021. In this context, India wants to get alternative value protection and Malaysia Derivatives Exchange could be one interesting option. (T2)
