Commodity Futures: A Maqasid Al-Shariah Based Analysis

This paper aims to analyse Malaysian Crude Palm Oil futures (FCPO) in light of the maqasid al-Shariah. The Shariah Advisory Council of the Malaysian Securities Commission (SAC) resolves that FCPO is permissible as it is in accordance with Shariah principles. The maqasid al-Shariah is the objectives and wisdom (hikmah) as prescribed by the Shariah in all its rulings to preserve the benefits of, and prevent harm to, human wellbeing. It can be categorized into three broad categories, namely daruriyyah (necessity), hajiyyah (requirement) and tahsiniyyah (embellishments). The approaches used in this study are document analysis and interviews. This study found that FCPO does not fulfil the categories of daruriyyah (necessity) and hajiyyah in the maqasid al-Shariah. Thus, it is suggested that FCPO should promote maqasid al-Shariah in its holistic direction. The legality of a financial contract is judged from the contract (aqd) aspect and equally important is on its economic and social impacts to the society.