Phosphate rights leave 230 euros behind

The second week of July yields a quote of €227,50 per right. This amounts to a price of €9.782,50 per cow, based on 43 kilos of phosphate. It is a decrease of €4 compared to the quotation of 1 week earlier.

Where is the bottom?
The decline is mainly caused by the release of slightly more supply, in combination with a wait-and-see buyer. The question now is: at what level will the market find a bottom? It is very likely that this will not happen at a price below €200 per right. This is because there are more and more reports that there are still dairy farmers who have to do something: either buy rights or get rid of cows.

In addition, we are waiting for the elaboration of the exemption for young cattle intended for beef farming. This was expected around July 1, but that deadline has been moved to mid-July. There are also dairy farmers who have not received any results regarding their emergency status. It creates uncertainty, because what is wise? Get rid of cows on the chance that a negative judgment will be made, or wait and pay a higher price later (in case a negative judgment is made)?

Lease?
A new factor is the question of being able to lease rights without a skimming of 10%. Until it is clear what the final assessment of Agriculture Minister Carola Schouten will be, it has created a new dynamic. There are still many loose ends, even though the year is already half over.

The phosphate rights system is far from complete, but obtaining financing is becoming increasingly difficult. The players in the phosphate rights market indicate that it is currently no longer a matter of making a phone call to obtain financing. It is a process that can take up to 4 weeks or even longer.

Problems at RVO.nl?
Finally, problems are also reported to the Netherlands Enterprise Agency (RVO.nl). Continuing transactions would be extremely difficult. Not only in phosphate rights, but also in other rights. In several cases, this means that the money remains in a third account for longer and the buyer does not yet receive his rights.  

There appear to be just as many arguments for a higher price as for a lower price. It is clear that the market is moving rapidly. Each question that is answered will cause the price to move up or down again.