Inside Milk
Phosphate rights have to hand in again
The exemption for young stock intended for beef cattle farming was well received in Brussels. It is news that could have caused a stir in the phosphate rights trade, but it is still too fresh to influence the price. The downward trend continues, bringing the price below €225 per right.
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The new policy rule and exemption mean that rights will disappear. It probably also means that phosphate rights have been traded that will expire. The question now is: how does the sector deal with this, and what consequences will it have for both parties?
Thin market
As the news is hot off the press, this will not affect the listing for week 29 yet. Just like in the previous week, this decreases by €4 and therefore comes to €223,50 per right. The narrow price range is striking, because the market is described as thin. This usually results in a correct and large spread.
Traders find it difficult to indicate what is causing the calm. Does it have to do with the holidays, has the drought made the farmer decide to remove cattle or is he/she not counting on it to buy rights? In any case, it is clear that the slaughterhouses are busy. This while the number of slaughters has remained limited in recent weeks (for the time of year).
Where is the bottom?
However, in general the offer seems wider and buyers are leaning back to see where the price will form a bottom. Due to the disappearance of allowances from the market, that floor may be less low than would otherwise have been the case.
| DCA listing phosphate rights | Price range (week 29) | Number of problems | Average |
| €223,50 (-€4) | € 222,50 - € 224,50 | 6 | €223,50 |
| Explanation DCA Markets: The new policy rule and exemption of young stock from beef cattle have been approved by the European Commission. However, the news is still too fresh to include in the listing. The market: quiet. |
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