Futures and options exchange Bursa Malaysia Derivatives Berhad is looking into launching a used cooking oil (UCO) futures contract to meet increasing demand for it as a biofuel feedstock, according to a report by The Edge Malaysia citing a Bloomberg story.
The exchange has shared proposed specifications for the contract with industry participants in a document, according to sources quoted in the 10 October report.
The futures would be cash-settled and priced against the FOB Straits assessment for UCO by S&P Global Commodity Insights, a copy of the proposed guidelines seen by Bloomberg showed.
In the document, the exchange outlined plans to offer the US dollar-denominated contract in lots of 25 tonnes.
A spokesperson for Bursa Malaysia was quoted as saying specifications were intended for industry consultation and changes could still be made, with any contract launch subject to regulatory approval.
S&P Global declined to comment.
Waste oil biofuels consumption rose by almost 40% between 2021 and 2023, according to estimates by a Transport & Environment lobby group.
Bursa Malaysia offers a crude palm oil contract and lists futures for other commodities including palm olein and tin.
