KUALA LUMPUR: Bursa Malaysia will launch the Bursa Malaysia DCE Soybean Oil Futures (FSOY) contract following a licensing agreement with the Dalian Commodity Exchange (DCE).
The contract, which will be launched on March 18, is a first of its kind from a collaboration between a Chinese derivatives exchange and an Asian exchange based outside of China, said Bursa Malaysia chairman Tan Sri Abdul Wahid Omar.
“Under this agreement, Bursa Malaysia Derivatives is authorised to use the settlement price of DCE Soybean Oil Futures as the basis for calculating the settlement price of the US dollar-denominated FSOY contract,” he said in his speech at the Palm Oil Conference 2024 (POC2024) yesterday.
“It will also be the first non palm-based edible oil futures contract that will be listed on the Bursa Malaysia Derivatives. This will enable market participants to seamlessly arbitrage between soybean oil and palm oil prices on the same platform, both of which are common market substitutes,” he added.
Meanwhile, the government is proposing to consolidate oil palm smallholders into bigger groupings so they will be easier to manage.
With government assistance, they will then be adopted by various plantation companies in order to increase efficiencies and production yields.
“We were looking at how to help them; instead of four hectares (ha) we will group them in clusters up to 10,000ha. It will not be easy but we will have to start somewhere,” Plantation Industries and Commodities Minister Datuk Seri Johari Abdul Ghani told journalists at POC2024.
“We have to do this, otherwise we will face the issue of too many old oil palms, which will see the entire production suddenly coming down,” he added.
“A more pragmatic way to ensure that our smallholders will replant on time to ensure consistent maximum yields is to leverage the technical expertise of the large industry players and the Malaysian Palm Oil Board in terms of seeds, clones, fertiliser, as well as pest and disease management.
“Achieving larger scale is crucial to reduce costs per unit and increase productivity,” he added.
Johari said if all smallholders can adopt the management practices of large-scale plantations, fresh fruit bunch yields can easily increase by two tonnes per hectare.