Malaysia plans to launch used cooking oil futures in December

The Malaysian Derivatives Exchange (Bursa Malaysia) plans to launch a new used vegetable oil (UCO) futures contract as early as December, a director of the Malaysian exchange said on Wednesday. BMD’s UCO futures will be placed on top of the soybean oil futures contract launched in March.

“We are in the final stages, waiting for regulatory approval,” director Mohad Salim Kader Bakas told Reuters on the sidelines of an oilseeds conference in Dalian, China. The contract could take effect in December or the first quarter of 2025, depending on the approvals, he said.

Mohad Salim said the exchange, known for offering the most liquid crude palm oil futures in the world, is trying to position itself as a trading center for edible oils.

Used cooking oil is a key ingredient used in the production of renewable biofuels. Malaysia, the world’s second-largest palm oil producer, exported about 300,000 tons of biodiesel last year, while domestic consumption was about 1.1 million tons.

“We are starting to see growing demand for used cooking oil as the market is driven by sustainability initiatives and biofuel requirements,” said Mohad Saleem. “What makes our UCO contract unique is that it is focused on the Southeast Asian market, making the contact more relevant to industry needs and trends in the region.”

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Tags: Malaysia, edible oils