Analysis Phosphate rights
'Current asking price for phosphate right lease too great'
Although it is now possible to lease or lease phosphate rights without skimming, there is little or no business being done. The current asking prices of leasers are too high. Trading in rights to buy continues at a calm level.
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Now that it is possible for lessors to lease phosphate rights without skimming, phosphate rights are offered for prices between €20 and €25 per kilo. Various market parties consider this level to be high and call the prices asked too high. It is pointed out that in recent years at the end of the year there is almost always a large group of dairy farmers where several hundred kilos of phosphate remained unused.
Leasing with a skimming percentage was not interesting, which sometimes meant that supply did not come to the market. Insiders expect that there will be more supply of leasing rights towards the end of the year now that skimming-free leasing or leasing is possible. The market laws of supply and demand must determine at what price level supply and demand meet. However, parties expect this to be around €10 rather than around €20. Especially because milk production is not yet at a high level.
Purchase rights slightly cheaper
The market for purchasing rights continues at a fairly quiet level. Prices have fallen slightly in recent days and the DCA quotation for Phosphate Rights this week amounts to €145,50 for 100% usable rights. That is €1,00 lower than one week earlier. Prices are therefore slightly above the levels of previous years.