Bursa Malaysia is cooking up something big — and it’s not in the kitchen. On December 16, 2024, Bursa Malaysia Derivatives officially launched the Used Cooking Oil Futures (FUCO), making waves as the first of its kind in Malaysia.
This isn’t just a financial product; it’s a game-changer for the commodities market and a major step towards environmental sustainability.
What? Used Cooking Oil?
Yes, It’s Now a Futures Contract!
Yes, It’s Now a Futures Contract!
Yes, that leftover oil from frying your favourite nasi lemak sambal or goreng pisang has value! 😂😃
On its debut, a total of 42 contracts, representing 1,050 metric tons of used cooking oil was traded, showing strong initial interest. But why all the excitement?
The launch of FUCO follows a licensing agreement with S&P Global Commodity Insights (SPGCI) for Bursa Malaysia to use Platts UCO FOB Straits price assessment for the calculation of the FUCO final settlement price.
Used Cooking Oil (UCO), often discarded as waste, can be repurposed into biofuel, a renewable alternative to traditional fuels. Converting used cooking oil into a valuable resource for use in areas like transportation has the potential to reduce greenhouse gas emissions, mitigating climate change concerns.
Additionally, sustainability practices like repurposing UCO for biofuel align with circular economy principles, as it diverts waste from landfills and reduces pollution.
Six Reasons for Investors: Why Trade FUCO?
- Hedge Price VolatilityUCO prices are subject to fluctuations due to changes in supply and demand, policy shifts, and market conditions. Trading FUCO allows market participants to hedge against price volatility, protect profit margins and manage risk exposure effectively.
- Access to a Growing MarketThe global market for UCO is expanding, driven by the increased demand for biofuels and renewable energy sources. FUCO provides opportunities to participate in this dynamic and growing market.
- Transparent and Regulated TradingTrade with confidence in a secure and transparent marketplace regulated by the Securities Commission Malaysia that provides a reliable framework for all trading activities.
- Support Sustainability Goals (Btw, remember to follow our new ESG & Sustainable FB page)UCO is a key feedstock for sustainable fuels. By trading FUCO, participants support the circular economy and contribute to global sustainability efforts by promoting the recycling of waste oil.
- Efficient Price DiscoveryThe futures market provides real-time pricing data reflecting global supply and demand, allowing traders and investors to make informed decisions based on current market conditions.
- Portfolio DiversificationFUCO is an alternative asset class for investors and traders, enabling portfolio diversification and exposure to the growing renewable energy sector.
The launch of FUCO is a win-win for everyone — investors, businesses, and the environment. It reinforces Malaysia’s position as a leading commodities hub while contributing to the global shift towards green energy.
So, whether you’re a trader searching for the next big opportunity, a business aiming for cost stability, or an eco-warrior at heart, FUCO is something to keep an eye on.
What do you think about this innovative development? Share your thoughts in the comments below — We’d love to hear how you see this reshaping Malaysia’s commodity trading landscape!
More info: Bursa Malaysia's FUCO
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