It was generally another quiet week for the trade in phosphate rights. Not every trader has traded rights due to lack of supply or demand. Will the unchanged creaming percentage still play a role in the supply of phosphate rights?
The phosphate rights market has again had a quiet week. Some rights have been traded in dribs and drabs. The market is currently at an impasse due to limited supply and demand, one trader pointed out to the market.
The winter weather may have also brought extra calm to the market, because dairy farmers had other priorities during the frost. Buyers generally still have a wait-and-see attitude towards higher prices. The DCA quotation for phosphate rights for this week amounts to €127, which is €1 above the average price level of last week.
Creaming percentage unchanged for the time being
Agriculture Minister Carola Schouten has informed the House of Representatives that he will keep the creaming percentage at 20% for the time being. On 1 February 2021, the number of phosphate rights was still above the ceiling. The number of phosphate rights in dairy farming has fallen to 85,4 million kilos and is therefore below the production ceiling of 84,9 million kilos, but the total number of phosphate rights, including beef cattle farming, is still above the ceiling.
The supply of phosphate rights may become somewhat wider now that it is known that the skimming percentage will remain unchanged. Dairy farmers who want to sell rights and who were awaiting a possible change in the creaming percentage may be more willing to sell the rights now that it is clear that the creaming percentage will remain at 20% for the time being. However, traders' expectations are different on this.