Navigating the Future: An Exclusive Interview with Mohd Saleem Kader Bakas on Derivatives, ESG, and Global Trade

Globoil Post Exclusive Interview with Mohd Saleem Kader Bakas

In a recent conversation with Globoil Post, Mohd Saleem Kader Bakas, the Director of Bursa Malaysia Derivatives Berhad, shared his insights on the role of derivatives in the edible oil and agricultural trade sectors, the integration of ESG principles, and the challenges and opportunities of making Bursa Malaysia Derivatives' products available globally.

The Role of Derivatives in Price Discovery and Risk Management

Mohd Saleem Kader Bakas emphasizes the significance of derivatives, such as futures contracts, in the edible oil and agricultural trade sectors. He states, "Derivatives contribute to price discovery by allowing market participants to express their views on future commodity prices, thus providing valuable information about supply and demand expectations. This helps stakeholders make informed decisions."

He further elaborates on the risk management benefits, "Businesses in the agricultural sector, including the upstream and downstream of the supply chain, can hedge their price risk by taking opposite positions in the futures market, ensuring stable revenue streams, and protecting themselves from market fluctuations."

Highlighting the broader implications, Mohd Saleem Kader Bakas adds, "The existence of liquid futures markets enhances overall market efficiency, attracting more participants and aligning prices across different markets. This global integration fosters transparency and facilitates investments in the agricultural sector, potentially leading to increased productivity."

Integration of ESG Principles in the Edible Oil and Agri Trade Industry

Addressing the growing demand for sustainable practices, Mohd Saleem Kader Bakas observes, "The edible oil and agri trade industry is increasingly integrating ESG (Environmental, Social, and Governance) principles in response to the growing demand for sustainable and responsible practices."

He points out the industry's efforts, "More and more companies are seeking ESG-related certifications to validate their adherence to sustainability criteria by getting Roundtable on Sustainable Palm Oil (RSPO) and Malaysian Sustainable Palm Oil (MSPO) certification."

Proudly, he mentions Bursa Malaysia Derivatives' initiative, "Bursa Malaysia Derivatives (BMD) prides itself for being one of the first exchanges to mandate any physical delivery of Crude Palm Oil (CPO) under its FCPO contract must be sourced from Palm Oil Mills that fulfil Oil Palm Management Certification (OPMC) under the Malaysian Sustainable Palm Oil (MSPO) Certification Scheme requirements. This was put in place back in April 2021."

Challenges and Opportunities in Global Expansion

Mohd Saleem Kader Bakas, who facilitates international development and collaborations, shares his experiences, "When an exchange aims to make its products and services available to traders across the globe in the edible oil and agricultural trade industry, it encounters both challenges and opportunities."

He lists the challenges, "Navigating diverse regulatory frameworks, establishing efficient and easy market access and connectivity, dealing with time zone and operational challenges can be complex."

However, he also sees the brighter side, "International development and collaborations present opportunities such as accessing new markets, enhancing global brand recognition, fostering product innovation through collaboration, forging strategic partnerships and alliances, and establishing industry leadership."

Vision for the Future of Global Derivatives Trading

Mohd Saleem Kader Bakas concludes with his vision, "I would like to see the global derivatives marketplace continue to embrace innovation and technology and use global market connectivity to facilitate international trading ensuring accessibility for all types of investors and traders from diverse backgrounds and ensure investor protection through robust regulations to ensure fair and transparent trading practices."

Stay tuned to Globoil Post for more exclusive interviews and insights from industry leaders.

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