Fertilizer Swaps

Fertilizer derivatives are cash-settled swap agreements settled against the Fertilizer Index, which is produced weekly and represents physical spot prices in the market. An FIS cash-settled swap allows a buyer and a seller (counterparties) to agree on a price in the forward market for a specific fertilizer product for a specified future period. It is an agreement between a buyer and seller to pay the difference between a price agreed upon today and the future price of a specific fertilizer at an agreed point of time.

Currently, FIS specialises in swaps involving the following types of fertilizer:

• Urea (Prill)
• Urea (Gran)
• Ammonia
• DAP
• UAN (32% N)

View our detailed producer and trader examples:

Producer Example | Trader Example

Managing risk through fertilizer swaps

FIS cash-settled swaps are principal-to-principal agreements that can be used by traders, producers and end users to secure a price in the forward market to hedge or manage price risk and protect against adverse price movements in volatile markets.

There is no physical delivery of product. Settlement of the difference between the FIS swap contract price agreed between counterparties and the Fertilizer Index spot price is a financial transaction only.

For more information about fertilizer swaps or to discuss trading opportunities, contact the FIS office in your region.