Euronext is to launch the first physically-deliverable futures contract for nitrogen solution in Autumn 2016. Aimed at the European market, this new contract will complement the Group’s commodity futures offering.
It will enable Euronext to offer users a comprehensive suite of tools to manage price risk and cover their overall positions more efficiently, for both agricultural inputs and for grains and oilseeds such as wheat, rapeseed and corn.
Combining both urea and ammonium nitrate, UAN-30[1] solution is a common element of the family of nitrogen-based fertilisers used throughout the agricultural industry. Euronext will offer a physically delivered future traded in euros and backed by partners across the entire fertiliser supply chain, from producers and traders through storage terminal operators to cooperatives. The delivery point will be in Rouen (France), a major trading area for fertiliser imports as well as for crop exports such as wheat. The initial expiry calendar has been set for March, June, September and November over a 2-year horizon, reflecting the seasonal pattern of sowing, manuring and harvesting for different types of crop. Clearing will be handled by LCH SA, subject to regulatory approvals.
François Terrassin, CEO of Rubis Terminal, a storage specialists for fertiliser and agro, oil and chemical products, and Euronext’s partner for the new contract, says: “Rubis Terminal is delighted to team up with Euronext to launch this new contract. Our Rouen site is a major fertiliser supply and distribution platform for the agricultural sector and is ideally suited for the future success of this contract. We believe this initiative will make it easier for market players to access our offering and will confirm our position in Europe and worldwide.”
Olivier Raevel (pictured), Head of Commodities at Euronext, says: “Our nitrogen solution futures contract is intended for the whole fertiliser industry and its end-users, particularly cooperatives, who are key users of Euronext’s commodity contracts. Designed to meet the needs of an industry that is already familiar with instruments for hedging price risk in commodities, it will diversify our product offering. We are confident that this new contract will be a success and are keen to continue offering innovative solutions to our clients in this sector.”
