KUALA LUMPUR: Chicago Mercantile Exchange Holdings Inc (CME) will launch its US dollar-denominated palm oil contract by next month.

"The USD contract will be launched within the next month and a half, the exact date will be announced shortly," CME president Phupinder Singh Gill told reporters at the Palm and Lauric Oils Conference & Exhibition here yesterday.

Bursa Malaysia Bhd's CEO Datuk Yusli Mohamed Yusoff said CME's new USD contract would help to raise the international profile of palm oil trading.

He noted that it will be a cash-settled contract based on the settlement price of Bursa's crude palm oil futures or FCPO contract, hence creating more opportunities for Bursa's contract volume to grow as well.

Bursa is a partner of CME in offering the new contract. CME Group bought a 25% stake in a derivatives unit of Bursa Malaysia last year.

Malaysia's FCPO contract, the global benchmark price-setting futures contract for crude palm oil, is also set to make its debut on CME's Globex electronic trading platform in the second half of the year, Yusli said.

He added that the move would help to make the FCPO contract more available to international traders globally and this was something that the Malaysian stock exchange was looking forward to.

On Bursa's efforts to popularise the futures contract so far, Yusli said: "We traded about four million contracts last year (2009)... that is a growth of about 33% on the year before. Our internal projections are to see similar growth for this year as well."

On plans by Indonesia Commodity and Derivative Exchange to launch a crude palm oil (CPO) futures contract next month, Yusli said Bursa Malaysia welcomed competition, as it would help raise the international profile of palm oil contracts.

He added that Bursa was quite confident however, that Bursa's existing FCPO product would be able to remain as the global price benchmark for CPO, given its 20 years' track record.

Meanwhile, Minister of Plantation Industries & Commodities Tan Sri Bernard Dompok said at the conference that based on the current rate of production, the country's CPO output for this year will be an estimated 18.1 million tonnes, which is higher than in 2009.

He also reported that exports of palm oil products in 2009 amounted to RM49.59 billion compared with RM65.2 billion in 2008.

Going forward, Dompok said he was confident exports of CPO products would fare better this year.

"There was a drop from 2008 to 2009 due to pricing mechanism. In fact, the (export) figure showed a slight increase. But this year the prices are a bit better and so we are going to achieve what had been seen in 2009," he said.

On land use for palm oil production, Dompok said overall, there was no need to cap it because there was not much land available in Malaysia for future cultivation of oil palm. At present about 4.7 million hectares of land were cultivated with oil palm, he said.

Government policy on land utilisation for the long term was for 50% to be under permanent forest cover, he added.

On the B5 palm oil biodiesel mandate, Dompok told reporters he would be calling the press on the matter, "in the next few days".