The price of phosphate rights has never fallen so sharply before

Traders and intermediaries report that the lowest price at which they traded until Wednesday, December 20, is €178 per right. The highest price is €195 per right.

Depreciability
The reason for the price drop is that buyers are staying away, while supply is slowly increasing. Dairy farmers who need more phosphate rights in 2018 are keeping a low profile. This may have to do with the fact that it was announced last week that the phosphate rights not tax depreciable .

However, on Wednesday evening, December 20, the Ministry of Agriculture, Nature and Food Quality (LNV) announced that the production rights indeed depreciable are. The end date of the phosphate rights has also been set at 2028.

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The price of phosphate rights has shown a sharp decline.

Traders suspect that dairy farmers are also waiting for the decision, which shows how many phosphate rights dairy farmers receive, and how the skimming of 8,3% will affect the individual company.

The payment of the 2017 payment rights and the development of the milk price also play a role. Dairy farmers are currently busier with the purchase of VVOs (replacement manure processing agreements) to close their manure accounts for 2018. 

Supply is increasing
At the same time, the supply of phosphate rights is increasing. A group of providers still wants to benefit from the current price and profit. However, another group of providers is still trading on the price of a few weeks ago and demands €200 per right.

Traders and intermediaries say that this is not a realistic requirement. They emphasize that trading in phosphate rights is pre-eminently based on day trading and is highly subject to emotions.