The European Energy Exchange (EEX), in cooperation with Cleartrade Exchange (CLTX), is to launch an extension to its Trade Registration services for fertiliser contracts on 6 January 2015.
The product offering includes six derivatives contracts for fertilisers based on Urea, Diammonium Phospate (DAP) and Urea Ammonium Nitrate (UAN) for different delivery points in the United States, Europe and North Africa. All products are cash-settled agreements settled against market indexes, published by Argus Media Limited, Fertecon Limited and CRU International Limited in “The Fertilizer Index*” report. Due to the small contract sizes of 25 tons compared to the standard size of 500 tons, this move promotes increased flexibility for EEX customers.
“Additionally listing CLTX fertiliser contracts at EEX will enable access to these products for an even wider network of partners”, says Richard Baker, Chief Executive Officer of CLTX. “At the same time, it will be possible to clear transactions at a further clearing house, European Commodity Clearing (ECC).”
"The launch of fertiliser contracts constitutes the entry of EEX into the agricultural derivatives segment, which we will complement with further products in May 2015", says Peter Reitz, Chief Executive Officer of EEX. “Furthermore, EEX will launch its offering for freight futures in January which provides significant benefits for participants who are also active on the fertiliser markets.”
With the clearing of freight and fertiliser products on one platform, market participants can hedge price fluctuations in the physical fertiliser markets and eliminate counterparty credit risk while at the same time, optimising transport costs for fertilisers. Furthermore, by holding all positions at the same clearing house, participants benefit from netting effects, since ECC provides cross-margining across various markets and exchanges, including CEGH Gas Exchange of Vienna Stock Exchange, EEX, EPEX SPOT, HUPX, Powernext and PXE.
