Bursa Malaysia launches UCO futures contract

A total of 42 contracts, representing 1,050 tonnes of UCO, was traded at the close of the first trading day, with FatHopes Energy Sdn Bhd and Mitsusho Sdn Bhd among the first traders to participate.

The launch of FUCO follows a licensing agreement with S&P Global Commodity Insights for Bursa Malaysia to use the Platts UCO FOB Straits price assessment for the calculation of the FUCO final settlement price.

Providing real-time pricing data showing global supply and demand, FUCO contract is being offered in lots of 25 tonnes.

“Currently, UCO transactions are primarily conducted on a spot or back-to-back basis, leaving many stakeholders vulnerable to price fluctuations,” Bursa Malaysia said.

“FUCO addresses this gap by offering a reliable and transparent platform for price discovery and hedging, helping stakeholders plan their operations and manage risks.”

FUCO is available for trading during the morning and afternoon trading sessions (9am-6pm Malaysia time, Monday to Friday) and the after-hours (T+1) trading session (9pm-11.30pm, Malaysia time, Monday to Thursday).

“The rapid growth in UCO collection and refining capacity across Southeast Asia makes the launch of FUCO both timely and highly relevant,” said Bursa Malaysia Derivatives director Mohd Saleem Kader Bakas. “Malaysia, with its strategic geographical location as a regional trans-shipment hub, is ideally positioned to become the focal point for UCO trading in the region. The FUCO contract, which uses FOB Straits pricing, is designed to reflect the market dynamics of Southeast Asia, aligning closely with the needs and trends of the regional biofuel industry.”

Bursa Malaysia’s new FUCO contract followed the launch of its soyabean oil futures contract last March. The bourse offers the benchmark Crude Palm Oil Futures (FCPO) contract and other contracts for palm oil derivatives such as palm kernel oil and palm olein.