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Date
 07/08/2001
News Provider
 Mahamad Rodzi Abdul Ghani
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 NULL
Headline
 ePomex set to serve palm oil

04 August 2001,(Business Times) - AT least 25 per cent of the country'scrude palm oil production within four years is the minimum transactionfigure needed to run the Malaysian Electronic Exchange for Palm Oil(ePomex), the world's first electronic bourse for the trading of oil palmproducts.

ePomex's maiden trading is due in early October but the vehicle for theexchange's establishment, Ecomex Palm Oil (M) Sdn Bhd, will be officiallylaunched on Aug 20.

The exchange will bring together growers, millers, refiners, downstreammanufacturers and overseas buyers in a single market, where actual offersand bids can be executed in an electronic environment.

ePomex is a joint initiative between HeiTech Padu Bhd and New Zealand'sGlobal Ecomex Trading System.

"If we can get 25 per cent of the total CPO production within four years,that will be enough to keep the exchange going," said HeiTech Paduexecutive chairman Datuk Mohd Hilmey Mohd Taib.

Malaysia currently produces about one million tonnes of palm oil a month,and with solid support from industry players, getting the 25 per cent markis not a big problem.

"(Implementing the exchange) will be easy if we can get the support of thebig boys in the industry," said Sabri Ahmad, director of Golden HopePlantations Bhd, a big player. Sabri pointed out that listed plantationfirms including Sime Darby Bhd, Kumpulan Guthrie Bhd, Austral EnterpriseBhd and IOI Corporation Bhd control some 80 per cent of the country's CPOoutput.

"I understand that some have already indicated support.

"Generally, we can initially expect some inertia and reluctance to try outsuch an innovation," Sabri said.

"However, an open, transparent marketplace will best serve the long-terminterests of both buyers and sellers. "We expect that this overiding edgewill push rapidly ePomex's growth." Hilmey and Sabri both spoke in KualaLumpur yesterday.

Hilmey said any exchange would benefit its members and users if it couldsecure a large percentage of the market trade.

"So every exchange faces a chicken and egg problem of growing volume."(But) by virtue of strong industry and Government support, we hope toachieve critical trading volume from inception." The geographical andproduct scope of the exchange would be restricted to ensure adequatetrading from day one.

"Our main concern is the people's wait-and-see attitude." ePomex promiseslower transaction costs, improved efficiency, greater transparency andmost importantly, wider market coverage for bids and offers.

"The (service) fee will be lower than what the industry is paying tobrokers. To us, making money is secondary. That's why we invited industryplayers to be part owners of e-Pomex." "In the absence of an activeelectronic exchange, the marketing personnel of a particular company onlyhave exposure to a small portion of this market," he said.


ECONOMICS & INDUSTRY DEVELOPMENT DIVISION
Malaysian Palm Oil Board ( MPOB ) Lot 6, SS6, Jalan Perbandaran, 47301 Kelana Jaya, Selangor Darul Ehsan, MALAYSIA.
Tel : 603 - 7802 2800 || Fax : 603 - 7803 3533