Inside Milk
Phosphate duties: correction after rapid price increase
The price of phosphate rights rose sharply last week. A correction is now following that price increase. It remains to be seen, however, where the market moves.
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The demand for phosphate rights remains in full force and that causes erratic price developments. Pulled last week the market a lot, with prices up to €275 per right at the beginning of this week. In the meantime, the market is trending downward again.
Whimsical market
The movements are strongly fueled by the balance between supply and demand, which can fluctuate significantly from day to day. The increase has created more supply, which in turn means that the price increase cannot continue. At the same time, traders say that relatively many dairy farmers are looking for large quantities of usable rights. In order to trade, the buyer and seller must find each other. Many parties are hesitant and 'afraid' of buying or selling rights that are too expensive or too cheap.
Despite the slightly downward trend, the DCA quotation for phosphate rights increases by €18,50 to €268,50 per right. In the background, demand for so-called '0% rights' is also lively, with prices up to €195 per right. It is difficult to say how the market will continue to tender, according to traders. Given the demand, the trend is probably upward rather than downward.
| DCA listing phosphate rights | Price range (week 36) | Number of problems | Average |
| €268,50 (+€18,50) | € 265 - € 271 | 6 | €268,50 |
| Explanation DCA Markets: The price of phosphate rights rose sharply in the second half of last week, ultimately reaching €275 per right. This rapid increase is now being followed by a correction. Market participants speak of a capricious, somewhat nervous market. |
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