Inside Milk
Phosphate price jumps due to Schouten measure
The plan by Minister Carola Schouten (Agriculture, Nature and Food Quality) to increase the creaming off of phosphate rights to 20% has breathed new life into the phosphate rights market. The price of phosphate rights has risen sharply over the past weekend.
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Various traders and commission agents say that dairy farmers want to quickly buy (sell) phosphate rights before the mandatory skimming is doubled to 20%. This means that the phosphate market is turning like a leaf on a tree, because there has been a slowly downward price trend in recent months. Moreover, relatively few rights were traded at that time.
Substantial price increase
Relatively many rights have been traded since last weekend, various traders say. Prices vary between €173 and €179 per right, while the DCA quotation for phosphate rights fell by €2 last week to €158 per right. However, the majority of the trade is limited to small portions (100 to 300 kilos), as has been a trend for some time.
The coming weeks will reveal whether this price increase is a trend or whether there is a short-lived recovery. Opinions differ on this in the market.
Not retroactively
There is particular uncertainty in the market as to when the mandatory skimming will come into effect. A spokesperson for Schouten reports that the aim is to have the change in law come into effect as soon as possible. The spokesperson also says that the adjustment will not be introduced retroactively, but will only come into effect when the law is officially published.