Derivatives

USD Crude Palm Oil Futures (FUPO)

FUPO is a USD denominated crude palm oil futures contract which compliments the existing Ringgit denominated Crude Palm Oil Futures contract (FCPO), which is the global pricing benchmark for palm oil. The wide appeal of the FCPO has spurred Bursa Malaysia to expand its offerings in USD denominated commodity derivatives, to further globalise our futures market and position Bursa Malaysia as an internationally competitive marketplace for futures trading.

FUPO is cash settled against FCPO prices upon expiry, and the final settlement value for the FUPO contract shall be the average price of the daily spot month settlement price of the FCPO contract on the last 5 business days prior to the expiration. The currency exchange rate used to calculate the final settlement value for FUPO will be sourced from Bank Negara Malaysia, the Central Bank, to ensure transparency of the final settlement value.

The FUPO contract will provided segments of the CPO industry, such as producers and refiners, a liquid, cash-settled hedging mechanism. FUPO will also enable foreign buyers and importers to hedge their exposure to CPO price fluctuations in USD.  The availability of side by side trading of FUPO and FCPO also increases trading and arbitrage opportunities for commodity funds, hedge funds, and other traders.