The Asia Pacific Exchange (APEX) has completed the cargo loading for the first physical delivery under its contract.
The inaugural delivery of 4,000t of palm olein recently took place in Dumai Port, Indonesia from where the product will be shipped to Pakistan.
The cargo was loaded aboard Aurora Tankers' Hong Kong-flagged 44,400-dwt Maritime Jingan (built 2003).
The transaction, undertaken through the free on board (FOB) basis, was carried out between KGI Securities (Singapore) as the buyer and UOB Kay Hian as the seller on behalf of AAA Oils & Fats Pte.
“We have started to trade APEX RBD Palm Olein futures since the launch of the contract,” said Alex Tan, deputy commercial director, AAA Oils & Fats.
“This contract fills the need in the market for a USD-denominated palm olein futures that covers the Indonesian FOB market, and we observed that it has attracted more participation as can be seen in the increasing open interest.”
Tan added that t hrough this participation, AAA Oils & Fats was now more confident with trading and delivery of APEX Palm Olein futures contract.
APEX, which is Singapore’s third derivatives exchange, started trading palm oil futures in Singapore in May this year.
It hopes its US dollar-denominated palm olein futures give traders another option beyond benchmark ringgit-denominated contracts.
It is also touting the exchange as a place for Southeast-Asian sellers and other international players to gain access to Chinese buyers.
Under the contracts, palm olein is for physical delivery, on a FOB basis at Pasir Gudang and Port Klang in Malaysia, while in Indonesia it is for Belawan port, besides Dumai.
The RBD Palm Olein Futures Contract is the first derivative product launched by APEX and is said to have attracted “strong interest” from the market since it was listed in May 2018.
“The average daily trade volume is around 51,000 lots and average daily trade value was $601m,” APEX said.
“The overall open interest has been increasing steadily, and there will be more physical deliveries expected in the upcoming contract months.”
