UPDATE 1-Singapore's 3rd derivatives exchange kicks off trading with palm oil contract

contract@

* Early trade volumes on palm olein futures seem good -trader

* New exchange hopes to gain foothold in region

* Plans to launch other commodity futures

* Bourse has Chinese backers (Adds trader comment, background)

KUALA LUMPUR/SINGAPORE, May 25 (Reuters) - Singapore's third derivatives exchange kicked off trading on Friday with the launch of palm oil futures, with other contracts expected down the line.

The U.S. dollar-denominated palm olein futures will give traders another option beyond benchmark ringgit-denominated contracts offered from Malaysia as the Asia Pacific Exchange (APEX) looks to get a foothold in the region.

APEX's September palm olein futures contract opened at $635 a tonne and was last down 0.3 percent. A November contract was up 1.7 percent after opening at $650 a tonne.

"Traded volume in the first half-hour seems very good, but we need to see if this is just first day euphoria or if the market can sustain," said a palm oil futures trader in Kuala Lumpur. He declined to be identified as he was not authorized to speak with media.

APEX is backed by Eugene Zhu, a former CEO of China's Dalian Commodity Exchange, and has said its major shareholders include Chinese conglomerate CEFC China Energy, Chinese futures commission merchant Xinhu Group and other international investment funds.

The bourse plans to offer other futures and options based on commodities from sectors including agriculture, energy, petrochemicals and metals, as well as on interest rates and stock indices.

The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange closed up 0.8 percent at 2,492 ringgit ($625.89) a tonne on Thursday evening, while the most-active palm olein contract on China's Dalian Commodity Exchange was last down 0.2 percent at 5,154 yuan ($808.38).

Palm oil comprises more than 70 percent of China's edible oil imports of about 5 million tonnes a year, although demand has been slowing as record soybean imports boost soyoil production. The country is the world's second-largest palm oil buyer after India.

Indonesia and Malaysia produce nearly 90 percent of the world's palm oil.

Bursa Malaysia launched a dollar-denominated crude palm oil contract in September 2008, and a dollar-denominated palm olein contract in June 2014. However, trading volumes for both contracts are close to zero as the contracts lack market makers, said Kuala Lumpur-based traders. ($1 = 3.9815 ringgit) ($1 = 6.3757 Chinese yuan) (Reporting by Emily Chow in Kuala Lumpur, Naveen Thukral in Singapore Editing by Joseph Radford)