Trading in

Crude Palm Oil

• Introduction to Crude Palm Oil

• Statistics

• Contract Information

• Trade Participants in the Region

• Trade Associations

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 Introduction to Crude Palm Oil

Crude palm oil is extracted from the fruits of the

Elaeis guineensis tree.

Introduction to Crude Palm Oil

10° N
Equator
10° S

• Optimal temperature 24 – 32 °C

• Optimal rainfall 1,800 – 2,000 mm p.a.

• Indonesia & Malaysia constitute 85% of world palm oil production

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 Introduction to Crude Palm Oil
• Archeologists discovered remnants of palm oil in ancient
Egyptian tombs dating back to 3000 B.C.

• Palm oil were first introduced to Southeast Asia in 1848 with

four seedlings planted in the botanical gardens at Bogor, Java.

• Fruits of the palm oil that descended from these seedlings

have higher yields, partly as a result of geographical location.

• Agricultural engineer, Adrien Hallet, and his friend, Henri

Fauconnier, capitalised on this and pioneered the growth of
the palm oil industry in Indonesia and Malaysia.

Introduction to Crude Palm Oil

• Tree takes on average 3 years to reach maturity.

• Reaches maximum productivity between 6-10

years when thereafter, yield declines.

• Productive life of an oil palm tree continues for 20-

30 years after maturity.

• Fruits come in form of a bunch (fresh fruit bunch or

FFB) and weighs 10-25 kilos each. Each FFB
contains 1,000-3,000 individual fruits.

• Tree can produce up to 20 tonnes of fruit bunches

annually

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 Introduction to Crude Palm Oil
Plantations CPO Mills
Fresh Fruit Separation of
Bunch palm kernel and
harvested from extraction of CPO
oil palms

End Users CPO Refineries

Further processing Refining of CPO
into palm oil into refined,
products bleached and
deodorized palm oil
(RBDPO)

Introduction to Crude Palm Oil

• Cooking oil
Edible • Margarine
Products • Specialty fats
• Fats for bakery products

Palm Oil • Lubricants

Oleo- • Softening agents
• Vulcanizing agents
Chemical
• Fatty acids oil
• Cosmetics

Non-Edible
Soap
Products

Bio-fuels

Major End Uses of Crude Palm Oil

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 Introduction to Crude Palm Oil

Resources Products Markets

Sugar & starch Ethanol

plants
e.g. sugar, beetroot, Power generation &
corn transportation fuels
Oil crops
e.g. oil palm, soybean, Bio-diesel
rapeseed

The Bio-fuels Market

Introduction to Crude Palm Oil

• Biodiesel is produced through the
reaction of a vegetable oil (e.g.: palm
oil) with methyl alcohol or ethyl alcohol
in the presence of a catalyst*.

• Chemical process is called

transesterification which produces
biodiesel and glycerin.

• Chemically, biodiesel is called methyl

ester if the alcohol used is methanol
but if ethanol is used, it is called ethyl
Transesterification Process
ester. Both are similar but methyl
ester is cheaper due to lower cost for
methanol
* Commonly used catalysts are potassium hydroxide (KOH) or sodium hydroxide (NaOH)

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• Introduction to Crude Palm Oil

• Statistics

• Trading Volume

• Trade Participants in the Region

• Trade Associations

Statistics & Contract Information

Source: Bursa Malaysia Derivatives

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Statistics & Contract Information

Source: Bursa Malaysia Derivatives

Statistics & Contract Information

Source: Bursa Malaysia Derivatives

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Statistics & Contract Information

Source: Bursa Malaysia Derivatives

Statistics & Contract Information

Source: Bursa Malaysia Derivatives

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Statistics & Contract Information

Source: Bursa Malaysia Derivatives

Statistics & Contract Information

Malaysia’s Crude Palm Oil Demand & Supply (Jan 01 – Oct 08)

Source: Bursa Malaysia Derivatives

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 CPO Futures Contract Specifications
Contract Code FCPO
Underlying Instrument Crude Palm Oil

Contract Size 25 metric tons

Minimum Price RM1 per metric ton

Fluctuation
Daily Price Limits With the exception of trades in the spot month, trades for future delivery of Crude Palm Oil in any
month shall not be made, during any one Business Day, at prices varying more than 10% above
or below the settlement prices of the preceding Business Day (“the 10% Limit”) except as
provided below.
When at least 3 non-spot month contracts are trading at the 10% Limit, the Exchange shall
announce a 10-minute cooling off period (“the Cooling Off Period”) for all contract months
(except the spot month) during which trading shall only take place within the 10% Limit.
Following the Cooling Off Period, all contract months shall be specified as interrupted for a
period of 5 minutes, after which the prices traded for all contract months (except the spot month)
shall not vary more than 15% above or below the settlement prices of the preceding Business
Day (“the 15% Limit”).
If the 10% Limit is triggered less than 30 minutes before the end of the first trading session, the
following shall apply:-
a.the contract months shall not be specified as interrupted;
b.the 10% Limit shall be applied to all contract months (except the spot month) for the rest
of the first trading session; and
c.the 15% Limit shall be applied for all contract months (except the spot month) during the
second trading session.
If the 10% Limit is triggered less than 30 minutes before the end of the second trading session,
the 10% Limit shall be applied to all contract months (except the spot month) for the rest of the
Business Day.

CPO Futures Contract Specifications

Contract Months Spot month and the next 5 succeeding months, and thereafter, alternate months up to 24 months
ahead
Trading Hours First trading session:
Malaysian time: 10:30 a.m. to 12:30 p.m.
Second trading session:
Malaysian time: 3:00 p.m. to 6:00 p.m.

Speculative Position Limits 500 contracts net long or net short for the spot month
5,000 contracts for any single delivery month except for the spot month
8,000 contracts for all contract months combined

Final Trading Day and Maturity Contract expires at noon on the 15th day of the delivery month, or if the 15th is a non-market day, the
Date preceding Business Day.

Tender Period 1st Business Day to the 20th Business Day of the delivery month, or if the 20th is a non-market day,
the preceding Business Day.
Contract Grade and Delivery Crude Palm Oil of good merchantable quality, in bulk, unbleached, in Port Tank Installations approved
Points by the Exchange located at the option of the seller at Port Kelang, Penang/Butterworth and Pasir
Gudang (Johor).
Free Fatty Acids (FFA) of palm oil delivered into Port Tank Installations shall not exceed 4% and from
Port Tank Installations shall not exceed 5%.
Moisture and impurities shall not exceed 0.25%.
Deterioration of Bleachability Index (DOBI) value of palm oil delivered into Port Tank Installations shall
be at a minimum of 2.5 and of palm oil delivered from Port Tank Installations shall be at a minimum of
2.31.
Deliverable Unit 25 metric tons, plus or minus not more than 2%.
Settlement of weight differences shall be based on the simple average of the daily Settlement Prices of
the delivery month from:
a.the 1st Business Day of the delivery month to the day of tender, if the tender is made before the last
trading day of the delivery month; or
b.the 1st Business Day of the delivery month to the Business Day immediately preceding the last day
of trading, if the tender is made on the last trading day or thereafter.

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• Introduction to Natural Rubber

• Statistics (2005/2006)

• Trading Volume

• Trade Participants in the Region

• Trade Associations

Trade Participants in the Region

Malaysia
Refiners Brokers
1 Cargill Sdn Bhd 1 Agri Commodities Pte Ltd
2 Felda Sdn Bhd 2 Ling Chihsien Sdn Bhd
3 Golden Jomalina Food Industries Sdn 3 Marpro Oils & Grains Sdn Bhd
Bhd 4 Matthes & Porton (M) Sdn Bhd
4 Kempas Edible Oil Sdn Bhd 5 Noble Resources Pte Ltd
5 Keck Seng (M) Bhd 6 Sinaran Palm Services Sdn Bhd
6 KL-Kepong Edible Oils Sdn Bhd 7 Sprint Exim Pte Ltd
7 Lam Soon Edible Oils Sdn Bhd 8 Transgrain (M) Sdn Bhd
8 Intercontinental Specialty Fats Sdn Bhd 9 Tropical Oil Pte Ltd
9 IOI Edible Oils Sdn Bhd
10 Ngo Chew Hong Oils & Fats Sdn Bhd
11 Malaysia Vegetable Oil Refinery Sdn
Bhd
12 Pacific Oils & Fats Industries Sdn Bhd
13 Pan-Century Edible Oils Sdn Bhd
14 PGEO Sdn Bhd
15 Senawang Edible Oil Sdn Bhd
16 Southern Edible Oil Sdn Bhd
17 Unitata Bhd
18 Wilmar Edible Oils Sdn Bhd

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 Trade Participants in the Region
Malaysia
International Trading Houses/Dealers
1 AarhusKarlshamn Sdn Bhd 19 Felcra Bhd
2 Agmas Trading Pte Ltd 20 Felda-Johore Bulkers Sdn Bhd
3 Cargill Int’l Trading Pte Ltd 21 Ladang Petri Tenggara Sdn Bhd
4 Golden Agri Int’l Trading Ltd 22 MM Vitaoils Sdn Bhd
5 Jawala Corporation Sdn Bhd 23 Musim Mastika (M) Sdn Bhd
6 Josovina Commodities Sdn Bhd 24 Premium Vegetable Oils Sdn Bhd
7 Safic-Alcan (M) Sdn Bhd 25 Unilever (M) Holdings Sdn Bhd
8 PT Bina Karya Prima 26 Wawasan Tebrau Sdn Bhd
9 Louis Dreyfus Asia Pte Ltd
10 Mitsubishi Corporations
11 Mitsui & Co Ltd
12 Pacific Inter-Link Sdn Bhd
13 Pacific Rim Plantation Services Pte Ltd
14 Wilmar Trading Pte Ltd
15 Savola Mapoil Sdn Bhd
16 Alami Vegetable Oil Products Sdn Bhd
17 Asian Agri Abadi Oils & Fats Ltd
18 Derifats Chemicals Sdn Bhd

Trade Participants in the Region

Indonesia
Plantation companies/Processors/Exporters 19 PT Jaya Baru Pertama
• PTP Nusantara 20 PT Kinar Lapiga
• PT Socfindo 21 PT Satya Kisma Usaha
• PT London Sumatera 22 PT MP Leidong West Indonesia
• PT Hasjrat Tjipta 23 PT Tapian Nadenggan
• PT PD Paya Pinang 24 PT Supra Matra Abadi
• PT Tolan Tiga Indonesia 25 PT Megah Pusaka Andalas
• PT Sidojadi 26 PT Bakrie Sumatra Plant
• PT Serdang Tengah 27 PT Mopoli Raya
• Proyek Small Holder Kodam 28 Pusat Penelitian Kelapa Sawit
• PT Smart Corp 29 PT Indah Pontjan
• PT Asam Jawa 30 PT Mazuma Agro Indonesia
• PT Binanga Mandala 31 PT Permata Hijau Sawit
• PT Moeis 32 PT Damai Nusa Sekawan
• PT Gunung Melayu 33 PT PD. Perkebunan Sumatera Utara
• PT Cisadane Sawit Raya 34 PT Amal Tani Perk. Tj. Putri
• PT Torganda 35 PT Austindo Nusantara Jaya Agri
• PT Tasik Raja 36 PT Bandar Meriah
• PT Herfinta Farm & Plant 37 PT First Mujur Plant & Industry
38 PT Sumber Tani Agung

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 Trade Participants in the Region
Indonesia
Plantation companies/Processors/Exporters
• PT Merbau Jaya Indahraya 58 PT Perkenunan Minanga Ogan
• PT Umada 59 PT Pati Sari
• PT Karimun Aromatic Co Ltd 60 PT PP Kwala Simpang
• PT Tara Bintang Nusa 61 PT Kalimantan Sanggar Pusaka
• PT Serbahuta Jaya 62 PT Bina Sains Corp
• PT Perkebunan Inti Sawit Subur 63 PT Teumaron
• PT Daya Labuhan Indah 64 PT Swakarsa Sinar Sentosa
• PT Siringo-ringo 65 PT Cipta Futura
• PT Harisawit Jaya 66 PT Bintang Harapan Desa
• PT Nubika Jaya 67 PT Suryabumi Agrolanggeng
• PT Anugerah Langkat Makmur 68 PT Rea Kaltim Plantations
• PT Ratna Exlima 69 PT Bahari Lestari
• PT Sago Nauli 70 PT Perkebunan Lembah Bakti
• PT Karya Hevea Indonesia 71 PT Waru Kaltim Plant
• PT Condong Garut 72 PT Kalista Alam
• PT Tolan Tiga Indonesia 73 PT Fazar Baizury & Brothers
• PT Parasawita 74 PT Tunas Sawaerma
• PT Perkebunan Timbang Langsa 75 PT Palm Lampung Persada
• PT Mopoli Raya 76 PT Agra Para Citra
77 PT Agricinal

Trade Participants in the Region

Indonesia
Plantation companies/Processors/Exporters
• PT Poliplant Sejahtera 97 PT Indri Plant
• PT Surya Borneoindah 98 PT Cibaliung Tunggal Plant
• PT Jaya Mandiri Sukses 99 PT Inecda Palnt.
• PT Sinar Musi Prima 100 PT Gunung Mas Raya
• PT Forestalestari Dwikarya 101 PT Srikat Putra
• PT Bumipermai Lestari 102 PT Sari Lembah Subur
• PT Sumber Indah Perkasa 103 PT Eka Dura Indonesia
• PT Hindoli 104 PT CV. Citra Buana
• PT Binarupat Sepanglestari 105 PT Asiatic Persada
• PT Salim Ivomas Tunggal 106 PT Tunjuk Langit Sejahtera
• PT Ivo Mas Tunggal 107 PT Petaling Mandara Guna
• PT Inti Indosawit Subur 108 PT Sumber Tama Nusa Pertiwi
• PT Tunggal Perkasa Plantations 109 PT Eramitra Agro Lestari
• PT Ganda Buanindo 110 PT Sari Aditya Loka
• PT Tunggal Mitra Plantations 111 PT Jambi Agro Wijaya
• PT Adimulia Agrolestari Group 112 PT Trimitra Lestari
• PT Langgam Harmuni-Perk. 113 PT Kresna Duta Agroindo
• PT Air Jernih-Perkebunan 114 PT Jamika Raya
• PT Ciptadaya Sejatiluhur 115 PT Kirana Sekernan
116 PT Agrowiyana

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 Trade Participants in the Region
Indonesia
Plantation companies/Processors/Exporters 136 PT Inti Gerak Maju
• PT Bahari Gembira Ria 137 PT Sinar Kencana Inti Perkasa
• PT Agro Masang Plantation 138 PT Gawi Makmur Kalimantan
• PT Pritama Mulya Jaya 139 PT Damit Mitra Sekawan
• PT Perkebunan Anak Nagari Pasaman 140 PT Bumi Raya Investindo
• PT Gersindo Minang Plant 141 PT Alam Raya Kencanna Mas
• PT Mutiara Agam 142 PT Singaland Asetama
• PT Bakrie Pasaman Plantations 143 PT Candi Artha
• PT INcasi Raya 144 PT Buana Karya Bhakti
• PT Pasaman Marama Sejahtera 145 PT Kintap Jaya Wattindo
• PT Bintara Tani Nusantara 146 PT Bersama Sejahtera Sakti
• PT Sumber Andalas Kencana 147 PT Swadaya Andika
• PT Tidar Sawit Sungkai 148 PT Paripurna Swakarsa
• PT Tidar Kerinci Agung 149 PT Langgeng Muara Makmur
• PT Anam Koto 150 PT Laguna Mandiri\
• PT Perkebunan Nusantara 151 PT Ladang Rumpun Subur Abadi
• PT Agrowiratama 152 PT Sajang Heulang
• PT Tri Sangga Guna 153 Cakradenta Agung Pertiwi
• PT Indoraya Everlatex 154 PT Cakung Permata Nusa
• PT Pola Kahuripan 155 Nama Perusahaan

Trade Participants in the Region

Indonesia
Plantation companies/Processors/Exporters
• PT Tamaco Graha Krida
• PT Letawa
• PT Hardaya Inti Plantations
• PT Mamuang
• PT Surya Lestari
• PT Pasang Kayu
• PT Unggul Widya Teknologi Lestari
• PT Agro Indo Mas
• PT Binasawit Abadi Pratama
• PT Wana Sawit Subur
• PT Gemareksa Mekarsari
• PT Bangun Jaya Alam
• PT Satya Kisma Usaha
• PT Bisma dharma Kencana
• PT Sungai Rangit
• PT Agro Menara Rahmat
• PT Gunung Sejahtera Dua Indah
• PT Gunung Sejahtera Yoli Makmur
• PT Gunung Sejahtera Putih Pesona

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• Introduction to Natural Rubber

• Statistics (2005/2006)

• Trading Volume

• Trade Participants in the Region

• Trade Associations

Trade Associations
Palm Oil Trade Associations
Indonesia
• Palm Oil Association of Indonesia (GAPKI) http://www.gapki.org/

Malaysia
• Palm Oil Refiners Association of Malaysia (PORAM)
http://www.poram.org.my
• Palm Oil Millers Association of Malaysia (POMA)

Thailand
• Palm Oil Crushing Mill Association of Thailand (POCA)

International
• Federation of Oils, Seeds and Fats Associations (FOSFA)
http://www.fosfa.org

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 Disclaimer
The information contained in these course materials provided contain
information of a general nature only and are produced for investor education
purposes only. They do not constitute investment advice in any manner
whatsoever or have any regard to the specific investment objectives,
financial situation or individual needs of any particular person receiving
them. Examples are used for illustrative purposes only and do not constitute
investment advice.

Phillip Futures makes no guarantee, warranties and representations of any

kind whatsoever, express or implied, including but not limited to, the
accuracy, completeness, merchantability, or fitness for any particular
purpose, of such information or as to the results obtained by any person from
the use of any information or any financial instrument mentioned in the
course materials.

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