Bursa Malaysia plans to launch waste cooking oil futures amid biofuel demand

Bursa Malaysia Bhd, the world’s main palm oil exchange, is considering launching a futures contract for waste cooking oil (HVO) as demand for it as a biofuel feedstock is increasing, reports Free Malaysya Today.

Sources said the bourse has provided industry participants with a document with the proposed specifications of the contract. The futures will be settled in US dollars in batches of 25 tons and priced based on the FOB Straits assessment for used cooking oil by S&P Global Commodity Insights.

A Bursa Malaysia spokesperson said the specifications are for industry consultation and are still subject to change and the launch of any contract is subject to regulatory approval. S&P Global declined to comment.

Used cooking oil, a byproduct of restaurants and food manufacturers, serves as a feedstock for renewable fuels, demand for which is growing as governments seek to reduce the carbon footprint left by the industrial sector. A lobby group for transportation and the environment estimates that consumption of biofuels made from waste oil will grow by nearly 40% between 2021 and 2023.

The Malaysian bourse is known for its crude palm oil contracts, as Southeast Asia is home to most of the world’s oil palm plantations. The exchange also trades futures on commodities such as palm olein and tin.

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