Futures and options exchange Bursa Malaysia Derivatives Berhad (BMD) has formed a partnership with the Malaysian Palm Oil Certification Council (MPOCC) to develop and promote sustainability-related initiatives in the palm oil sector.

BMD said a memorandum of understanding (MoU) was signed between the two parties on 14 January, committing the partners to a framework of co-operation and collaboration in the areas of information exchange.

“We are committed to sustainability initiatives that go beyond standard-setting and certification by building a conducive environment for sustainability to grow and making MSPO (Malaysian Sustainable Palm Oil) as one of the globally accepted certified sustainable palm oil,” MPOCC CEO Mohammad Hafezh Abdul Rahman said.

“We are working towards the continuous improvement of our systems, standards and governance to ensure credible schemes with high integrity are available in the market. This strategic partnership will intensify our efforts together with Bursa Malaysia Derivatives in the relevant sector.”

MSPO-certified crude palm oil (CPO) is integrated into the derivatives market delivery process through BMD’s Crude Palm Oil Futures (FCPO) and East Malaysia Crude Palm Oil Futures (FEPO) contracts.

Following the implementation of this requirement for FCPO physical delivery on 1 April 2021, approximately 897,075 tonnes had been delivered through the exchange from April to December last year, BMD said, representing a 65.8% increase compared to the 540,975 tonnes traded via FCPO during the same period the previous year.

“The MoU… not only reinforces our commitment to drive sustainable development in the palm oil supply chain through our product offerings, but also to collaborate closely with MPOCC to enhance the overall competitiveness and appeal of Malaysian palm oil to importing countries,” BMD CEO Samuel Ho said.

Meanwhile, BMD reported record trading volumes last year, with the highest yearly trading volume for FCPO and Options on Crude Palm Oil Futures (OCPO) at 15.6M and 95,205 contracts respectively. The yearly trading volume for all products combined was also a record 18.4M contracts.

In its December 2021/January 2022 newsletter, BMD said palm prices were expected to say strong this year as production remained constrained due to rising fertiliser costs and long-standing labour shortages.