Inside Milk
Ample supply depresses the price of phosphate rights
The price of phosphate rights is again under pressure this week. What's causing this?
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The falling tenor is striking, because this is not in the line of expectation lay. However, this does not alter the fact that no explanations can be found.
Broad(er) offering
The price drop is a result of a wide supply. As a result, selling parties are increasingly coming up with offers and it is striking that sellers are increasingly not retiring dairy farmers.
However, the offer comes from dairy farmers who have calculated that they will not fill up the usable phosphate space; they are increasingly turning to selling or leasing. The reporting from Statistics Netherlands, that the phosphate space will not be fully used, contributes to this. At the same time, there are also many dairy farmers who still have phosphate rights on paper need.
Listing drops
Buying interest is not great, because traders say that it is quiet again this week. Trade is limited to small volumes. The DCA quotation for phosphate rights decreases by €4,50 to €236,50 per right. The price of the so-called 0% rights falls proportionately less rapidly and these rights are traded from €185 per right.