News Milk
Phosphate law a bit more expensive after a short dip
The trade in phosphate rights started the year calmly. Both buyers and sellers were hesitant. Last week, buyers seem more willing to do business while sellers continue to sit back. The DCA quotation for phosphate rights thus shows a clear plus.
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According to intermediaries, various factors underlie the higher prices. Dairy farmers notice that the liquidity position is slowly improving and also take the historical development of prices for phosphate rights into account when making a purchasing decision. They expect that prices may pick up again during the course of the year and are therefore keen to take action now. However, the supply is tight.
Sellers are just waiting
Now that the market is trending higher, sellers seem to be in no hurry to do business. In addition, they would like clarity about the possibility of leasing rights without skimming. If it becomes possible to lease 100 kilograms of phosphate without skimming to multiple parties, they may refrain from selling.
However, intermediaries in the phosphate rights trade point out that when skimming-free leasing to multiple parties becomes possible, this will significantly reduce the price for leasing rights. This would allow owners of unused rights to opt for sale again. Clarity about the precise rules surrounding skimming-free leasing could give the market some more direction this year.
The quotations for the DCA listing of phosphate rights led to an average price of €139 for 100% usable rights for this week, which is €4,50 more than last week.