DCE, FGV to expand delivery of palm oil futures in region

KUALA LUMPUR: China’s Dalian Commodity Exchange (DCE) has appointed FGV Holdings Bhd to be one of its partners to expand its palm oil futures delivery regionally.

In a joint statement yesterday, FGV chairman Datuk Wira Azhar Abdul Hamid said the parties had signed a memorandum of understanding to collaborate in the implementation of DCE’s Palm Oil Internationalisation Project.

“I am confident that with the collaboration, FGV will be able to work with DCE to grow beyond China and accelerate the process of delivering physical palm oil to buyers,” he said.

In return, FGV will provide support for DCE’s research in the palm oil futures and spot markets in Malaysia and Indonesia.

Azhar said the collaboration would potentially contribute RM1.5 million in revenue, with profits of RM525,000 per month, based on a throughput projection of 50,000 tonnes.

As one of the world’s leading commodity markets, DCE’s membership totals 165 firms and 3.09 million investor accounts, including 89,300 corporate accounts.

DCE has 280 designated delivery warehouses and 14 margin depository banks.

DCE executive vice-president Zhu Lihong said the exchange was the first to introduce the commodity options in mainland China and launch the internationalisation of a domestic mature futures product.

“DCE has successfully been transformed from a single and closed commodity futures exchange to a diversified, open and comprehensive derivatives exchange.

“DCE has started a new journey of building itself into a world-class derivatives exchange and a global commodity pricing centre and risk management centre,” said Zhu.

Azhar said FGV’s unit, FGV China Oils Ltd (FGVCO), was set to be a catalyst to unlock more potential collaborations in other related industries in China, and business-to-business ventures, to expand its palm-based business operations in the region.

FGVCO is based in Dongguan City and is involved in the operation of palm oil refineries, edible oil storage and trading, and the production and sales of palm oil, palm-industry related products.