CME Group Upgrades its Suite of Palm Risk Management Products

CME Group Upgrades its Suite of Palm Risk Management Products
27.06.2016 08:00 am

CME Group Upgrades its Suite of Palm Risk Management Products

Risk Management

CME Group, the world's leading and most diverse derivatives marketplace, today announced the launch of four new palm contracts to its suite of agricultural products, to begin trading on July 11, 2016, pending all relevant regulatory review periods.

These four new contracts will broaden CME Group's offerings within the palm derivatives complex, and include the USD Malaysian Crude Palm Oil Calendar futures (CPO), the USD Malaysian Palm Olein Calendar futures (OPF), the USD Malaysian Crude Palm Oil Average Price option (POO), and the Bursa Malaysia Crude Palm Oil-Gasoil Spread futures (POG).  These contracts will be available for trading on CME Globex, for submission for clearing through CME ClearPort, and will be listed with and subject to the rules and regulations of CME.

The new Malaysian Crude Palm Oil Calendar futures contract will reference Bursa Malaysia Derivatives' Crude Palm Oil futures contract prices, and the new Malaysian Palm Olein Calendar futures contract will be based on prices from the Thomson Reuters daily palm reference price for the palm oil complex. 

The new average price option contract will be cash-settled to the average daily settlement price of CPO futures, while the Bursa Malaysia Crude Palm Oil-Gasoil Spread futures contract will reflect the settlements of the CPO futures and the ICE Gasoil Calendar futures.

"Our customers have shown increased awareness of, and interest in using cleared futures on top of their traditional OTC positions in managing their risks, and these four new contracts will provide them the flexibility and efficiency to manage exposure to price volatility in the global palm oil market," said Nelson Low, Executive Director, Agricultural Products, CME Group.  "Together with our partners Bursa Malaysia Derivatives and Thomson Reuters, we remain committed to building a complete suite of palm products and helping market participants with their hedging and trading needs."

"The use of BMD's Crude Palm Oil futures contract (FCPO) in CME Group's new palm products recognises and reinforces FCPO's position as the global price benchmark," said K Sree Kumar, the Acting Chief Executive Officer of Bursa Malaysia Derivatives Berhad.  "These new palm products together with FCPO will provide the necessary risk management tools for the commodity industry, internationally."

Since CME Group launched its suite of Crude Palm Oil Swaps and Palm Olein Swaps in 2013, more than 170,000 contracts (representing more than 4.25 million metric tons) have been cleared, with record month-end closing open interest of 17,120 in May 2016 across both products.

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