Phosphate rights suddenly sold out

The apparently stable trade in phosphate rights has turned into an opportunistic market. The reason for this is that Carola Schouten (Minister of Agriculture, Nature and Food Quality) announced last week the so-called bottlenecks don't meet to come. The impact of this is much greater than many had previously thought.

This is somewhat surprising, because Schouten was expected to make this decision. A number of dairy farmers are also said to have received a 'no' on their submitted objection beschikking phosphate rights.  

Buy it anyway
The result is that a number of dairy farmers have received clarity and are therefore faced with a choice: buy phosphate rights or remove dairy cattle. In many cases the latter is not preferred, as the milk price is at a reasonable level and is also on the rise. Traders let us know that the phone red hot state, where the feeling is that the entire dairy farming Netherlands (crash or not) is inquiring fully about phosphate rights. The fear of many buyers is that prices will rise again to €200 plus.

The selling parties allude to rising prices. The supply therefore disappears from the market. This creates a mismatch, resulting in a very thin market. The expectation of many traders is that the selling parties will come out on top. Currently (May 23), there is hardly any supply available. The DCA quotation for phosphate rights increases by €9 to €192,50 per right. 

(Text continues below the chart)Prices of phosphate rights are well on their way to surpassing the provisional high of 2018.  

€200 is in sight again
It is expected that offers will start again from €200. This amount remains the psychological limit at which sellers offer, but buyers drop out. Rising prices are therefore in the offing, although it is impossible to say whether prices will actually rise above €200. Since a price increase of approximately €10 per week is possible, this level cannot be ruled out in the short term.