Fertilizer

LCH.Clearnet provides an independent clearing service for OTC Fertilizer swaps contracts settled against the Fertilizer Index.  This index provides reference prices calculated from data provided by FertlizerWEEK, FERTECON and FMB.

Annualized value of the physical fertilizer market is estimated at around US$500 billion worldwide.  Nitrogen (Urea / UAN) and Phosphates (DAP) comprise a major proportion of this trade and are already widely traded on the FIS (Freight Investor Services) fertilizer swaps market.  Total product value of FIS swaps traded in 2008 was US$600mn.

Fertilizer traders, producers and end users are increasingly looking to manage their price and counterparty risk through cleared trading opportunities.  By clearing through LCH.Clearnet, clients will benefit from the stability and the implicit security of our default fund.  FIS can easily and efficiently register their OTC brokered trades with LCH.Clearnet for clearing.

The service launched in October 2009 with strong support from the fertilizer trading community.  LCH.Clearnet is committed to working closely with the industry to ensure that our offering reflects the ongoing needs of the marketplace.