Inside Milk
The price of phosphate rights is falling, but for how long?
It is no longer news that the price of phosphate rights is falling sharply. Demand is also low this week, although it is expected to increase as soon as ...
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The reason for the rapid price drop is a lack of demand. Traders say that the purchasing parties are waiting and that is understandable given the rapid price drop. The decline is actually an incentive for (potential) selling parties to offer rights.
The DCA quotation for phosphate rights drops this week by €12,50 to €224 per right. The statements at DCA-Markets show that at the bottom end it has even dropped to €219 per right. The downward trend is expected to continue in the short term.
Payment of CAP funds
Demand is expected to pick up once dairy farmers have received the CAP funds. In principle, RVO.nl has time for this from December to June 2019. A spokesperson for RVO.nl says that the majority (approximately 90%) of the funds will be paid out at the beginning of December.
This could potentially affect the market from December onwards. The expectation is that relatively many dairy farmers still have to purchase phosphate rights to prevent an economic crime.