PARIS, Oct 12 (Reuters) - Euronext will launch its planned nitrogen fertilisers futures contract on November 14, with March 2017 as the first delivery position, as it aims to diversify its commodities segment to non-food products, the company said on Wednesday.
The so-called UAN 30 Nitrogen Fertiliser Solution contract will be based on urea ammonium nitrate (UAN) solution and physically deliverable in Rouen, northern France, which is also a delivery point for Euronext’s flagship milling wheat contract .
“Whereas the wheat is the output for Rouen, the UAN fertiliser is the input so that gives the perfect hedge for players in the farming sector,” Ulrich von Furstenberg, product manager commodities at Euronext, said.
Euronext’s UAN contract will be the first physically delivered nitrogen fertilisers futures contract. CME Group has launched several fertilisers contracts but these are cash settled and do not include western Europe.
Rubis Terminal, a specialist in the storage of chemical, oil and agricultural products and the main operator in Rouen, will act as the physical delivery point for the futures.
Euronext hopes its contract will attract farm cooperatives, fertiliser dealers, manufacturers as well as end users.
The exchange will offer a two-and-a-half-year trading horizon for the futures, based on March, June, September and November delivery positions, and clearing of the futures will be handled by LCH SA, it said.
The UAN fertiliser contract will be priced in euros, lots will be for 30 metric tonnes in bulk, ready for loading by truck or rail.
UAN 30 is a fertiliser solution derived from urea and ammonium nitrate with a total nitrogen content of 30 percent. Nitrogen-based fertiliser consumption represents about 60 percent of total fertiliser consumption, Euronext said.
The new product is part of Euronext’s strategy to diversify outside purely agricultural products, notably energy.
“Even though it is not an energy product per se, this is a very close product to natural gas,” Olivier Raevel, head of commodities at Euronext said.
Euronext launched wood pellet futures contract in November last year. It is considering other energy futures products such as biofuels, he added. (Reporting by Sybille de La Hamaide; Editing by Elaine Hardcastle)