Own picture

Inside Milk

Price of phosphate rights rises explosively

28 November 2018 - Wouter Baan

At the beginning of the week, Minister Carola Schouten (Agriculture, Nature and Food Quality) announced that dairy farmers will be fined if they produce more phosphate than the number of allowances allows. What does it do to the price of phosphate rights?

Do you have a tip, suggestion or comment regarding this article? Let us know

The hard line of Schouten makes dairy farmers realize that it is serious business with a farm-specific phosphate surplus. Reportedly, many dairy farmers are still short of phosphate space and they are now entering the market.

Explosive price increase
The price has risen sharply in a short period of time. Until Monday afternoon, the market continued to show a downward trend, with prices dropping back to €200 per right. In the meantime, rights are traded again for prices above €240 per right. Based on the statements, the DCA quotation increases by €15,50 to €239,50 per right. 

For several dairy farmers, buying is not an option, because they often do not have the liquid assets and therefore cannot complete the financing. They focus on lease rights; currently trading for prices between $50 and $60 per right. Leasing demand also requires liquid assets, because a volume of 500 kilos of phosphate (at €55 per right) costs more than €25.000. In most cases, the money must be immediately available.

Not much offer yet
According to a trader, many allowances have been traded in the past 2 days; in those 2 days his office brokered 5.000 kilos. The offer has now dried up considerably. Only just under 12.000 kilos of purchase rights are offered on the internet, where the offer has sometimes been 5 times as large in recent times. While the market has clearly moved in an upward direction, it is not clear whether the price rise will continue.

View the latest listing here.

Call our customer service +0320 - 269 528

or mail to supportboerenbusiness. Nl

do you want to follow us?

Receive our free Newsletter

Current market information in your inbox every day

Login/Register