Analysis Milk
Phosphate buyers are still staying away en masse
Prices for phosphate rights appear to have almost gone into free fall in the last week. The price for purchasing rights is even at the lowest level since 2016. Lease rights with skimming are also priced very low. Bargain hunting seems to pay off.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
The causes are still a matter of speculation. The situation surrounding bluetongue is regularly referred to. There is also talk about a large supply of stoppers. On the other hand, not everyone seems to be provided for yet.
Either way, there is plenty of supply, but demand is weak. "If someone is interested, you have to buy immediately," said a trader.
However, the price for leasing rights appears to be slightly less low than it appears at first glance. Non-skimming rights are offered for less than €20 per kilo of phosphate, but in these cases it is not just lease rights with skimming. These are mixed parties, with also a skimming-free lease.
For a while last week, the market seemed to be able to benefit somewhat from the higher guaranteed price of FrieslandCampina and the other higher milk prices, but the effect quickly passed. It is possible that the arrival of European payment rights later this year will provide another impetus to the market. If not, the phosphate market appears to be at a historically low level this year.