Price of phosphate rights gaps with 200 euros

After the market last week stabilised, prices are now picking up again. The reason for this is that there is a limited supply. In contrast, the demand is lively. Compared to previous price increases, this time there is no special news development. This makes the increase more difficult to explain.

The price picked up in mid-April after it was announced that the derogation was definitely in the pocket. Also the letter to parliament from agriculture minister Carola Schouten, which stated that pinching don't meet were introduced, brought commotion in the market.

Time is running out
According to traders and brokers, the current revival is a result of market forces, in which supply and demand run counter to each other. It is possible that dairy farmers are increasingly realizing that the time is running out to buy allowances. In many cases dairy farmers buy the phosphate rights in tufts (small portions of 300 to 600 kilos), spread over a longer period. This means that there is constant demand that intensifies as prices rise.

Clearing the bottom of the livestock is in many cases seen as an emergency measure. Due to the phosphate reduction plan, many dairy farmers have already cut their livestock. In addition, the notes milk price at an acceptable level, with the trend rather rising then descending.

Thin market, rising prices
The banks and traders let it be known that the necessary supply is still hidden. However, as prices pick up, the euro signs are getting bigger and bigger in the eyes of potential sellers. As a result, the offer often fades into the background.

The DCA quotation for phosphate rights will rise this week by €7,50 to €209 per right. However, there is a thin market at these levels, partly because buyers are starting to give up. The market is labeled as nervous, making it difficult to say whether the rising trend will continue. 

Click here for a historical price trend.