Launching trade date May 24, 2010
With the launch of futures on Crude Palm Oil (CPO), CME Group customers will be able to trade the world’s most-consumed edible oil in a cash-settled, dollar-denominated contract, with the safety and liquidity of CME Group.
This expansion of the edible oil product suite also creates opportunities for cross-trading with soybean oil based on the historically strong correlation between these products. Together, crude palm oil and soybean oil account for about 61 percent of all the edible oil in the world, with palm kernel oil an additional 4 percent of oil consumed.
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Both production and consumption of palm oil are growing. The main producers of the oil are Malaysia and Indonesia. The main consumers are China and India. Crude palm oil is widely traded and used around the world. It serves primarily as cooking oil but is also used to make soap, washing powders, personal care products and biodiesel.
Final Cash Settlement prices will be based on the Bursa Malaysia Derivatives Berhad Crude Palm Oil futures contract (FCPO). This is the global benchmark for crude palm oil that is physically delivered and traded in Malaysian ringgits.
Note: Nearby CPO futures will reference the third forward FCPO month.
Key features of Crude Palm Oil futures:
- Dollar-denominated
- Cash-settled
- Electronically traded on CME Globex
- Safety and liquidity of CME Group
- Contract months that mirror the ringgit-denominated physically delivered Bursa Malaysia contract (FCPO)
- Reduced capital requirements due to cross product margin efficiencies with other CME Group contracts
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