FERTILIZER & GRAINS
FIS is a leading broker for the specialised market for fertilizer derivatives, covering contracts in key international markets for urea, UAN, MAP and DAP. As the world’s population continues to grow, so too does food consumption/production and hence the demand for fertilizer use.
Fertilizer costs relative to total production have averaged around 18% for corn, 6% for soybeans and 11% for wheat in recent years. Fertilizer prices are highly cyclical and are subject to volatility just like any other commodity, especially as they are closely correlated to natural gas prices. The use of fertilizer derivatives helps facilitate forward price discovery and allows market participants to manage their physical price risk or to speculate on market direction.