Urea Futures on the Market Would be Good for Stable Development of Urea Industry

By CnAgri2018-09-19 14:24:20 Print Zhengzhou Community Exchange officially released announcement of collecting urea transaction warehouses. According to announcement, the companies which apply for transaction warehouses should be located in Shandong, Henan, Jiangsu, Hebei and Anhui, and there are no limitations on companies that apply for exemption from inspections on brands. If urea futures is listed on the market, it will bring opportunities for urea companies to avoid market risks, which will be good for stable development of urea industry.     
As a material for agricultural production, urea prices fluctuate greatly during off and busy season, bringing certain influence on supply and demand. After urea futures on the market, the players can use derivatives market to lock in the costs and benefits in advance in order to avoid risks. According to data, the trading unit of urea futures is 10 MT/hand, the lowest variable unit is 1 RMB/MT, the up-down range is ±4% and the deposit is 5%. High-class medium-sized and small granular urea for agricultural is planed to be urea futures benchmarks.    
For urea producers and large consumers, rationally using the tools such as hedging can effectively reduce their risks.