Price Calculation
How the swap prices are calculated with an example
The index is calculated from the three price ranges provided by FertilizerWEEK, FERTECON and FMB using a simple averaging technique to provide a single reference price. The highest and lowest of the six numbers are discarded, and an average calculated from the four remaining numbers: For Example:
Low High $200 (discarded) $203 $201 $204(discarded) $201 $203	The highest ($204) and the lowest ($200) are discarded and an average of the remaining number calculated. In cases where two or more of the panellists submit the same high and/or low price, only one will be discarded.
Price= (201+201+203+203)/ 4 = $202 Each of the Panellists posts price ranges every Thursday reflecting the business concluded within the last seven days, both spot and nearby forward business for shipment up to 30 days in the case of urea and ammonia and 60 days in the case of DAP. In estimating its price ranges each Panellist exercises its own judgment in weighting the importance of individual transactions. The three Panellists each have a track record for accurate and authoritative price reporting over a period of decades. Each is entirely independent and preserves its autonomy from the other Panellists and from all market participants. It is in the nature of these markets that there is a degree of interpretation in determining prices. The fact that the Fertilizer Price Indexes are comprised of three reputable independent information sources guarantees the generation of a representative price index. The averaging process, which discards the highest and lowest price indications, adds a further check and balance.
© 2005 FERTECON Limited, FMB Limited, CRU Publishing Limited. All rights reserved. No company or individual may use the price information contained herein for commercial purposes without the express permission of the publishers. No part of this index may be reproduced, stored in a retrieval system or transmitted in any form or by any means - electronic, mechanical, photocopying, recording or otherwise - without the prior written permission of the Copyright owners