The Zakat Academy (AZKA) of PPZ-MAIWP has officially launched a collaborative research project with Universiti Sains Islam Malaysia (USIM) titled “Zakat on Crude Palm Oil Futures (FCPO): A Fiqh Analysis and Methodology for Calculation”. This pioneering study is led by Prof. Dr. Muhammad Ridhwan Ab. Aziz, a prominent scholar in Islamic economics from the Faculty of Economics and Muamalat, USIM, alongside a research team from UNISZA and UTM.

Background of the Study

Crude Palm Oil (CPO) is one of Malaysia’s key agricultural commodities, widely traded through futures contracts on Bursa Malaysia Derivatives under the product known as FCPO. These contracts, certified as Shariah-compliant by the Securities Commission Malaysia, serve as a benchmark for global palm oil pricing.

Despite its compliance with Shariah principles, there remains a lack of clarity regarding the zakat obligations arising from FCPO transactions. This is particularly crucial given the financial significance of FCPO trading and its widespread participation among investors and industry players.

Objectives and Significance

This study aims to address several pressing questions, including:

• Should profits from FCPO trades be subject to zakat?

• What type of zakat is applicable—business zakat, agricultural zakat, or both?

• Who exactly is obligated to pay zakat—the farmer, investor, trader, or financial intermediary?

Using a rigorous takyif fiqhi (fiqh-based classification) approach, the research seeks to clarify the Islamic legal framework and propose accurate zakat calculation methodologies for this modern financial instrument.

Methodology

The study will be conducted over a six-month period using qualitative research methods, including:

• Literature review and fiqh analysis on relevant zakat categories

• Expert interviews involving practitioners and Shariah scholars

• Case analysis and practical recommendations based on real-world FCPO trading scenarios

Expected Outcomes

This initiative is expected to result in a comprehensive fiqh framework and calculation model for zakat on FCPO. The findings may also guide the formulation of official guidelines by zakat authorities and Islamic finance institutions. By addressing this modern issue, the study aligns with the goal of enhancing zakat collection through new financial avenues while ensuring compliance with Islamic jurisprudence.