Analysis Phosphate rights
Phosphate duties are approaching their 2016 low
The price of phosphate rights (purchase) continues to fall and is approaching a low not seen since the late summer of 2016, although the rights had a different status at the time. At their peak in 2018, they were three times as expensive. Lease rights are also historically quite cheap.
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Yet the phosphate trade is not booming, mediators report. One of them describes it as a cat and mouse game, but it is not entirely clear who is the cat and who is the mouse.
Those who wait to buy are still rewarded, but in the meantime it is time to do business, various parties believe. A number of large offices have already indicated that they will no longer do business after December 18.
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Private traders are not thinking about that and hope to be able to do business in the last days of the year. It is certain that many dairy farmers still want to buy phosphate, say traders. "You notice that they look three or four times a day, but buying is often not an option. That will not always remain the case. If there is any indication of rising prices, they will all jump on it."
Non-transparent market
A difficult point for buyers and sellers of phosphate is that the market is not transparent. Parties have to guess what the number of rights still available is and how many companies have not covered their needs.
Historically speaking, everyone can now get a bargain, because in week 37 of 2018 the price for purchasing rights peaked at €274,50 and last year there was a more modest peak at €187,00. The low point was in week 27 of 2016, when the price was €82,50 per purchase right.
All offers are bargains
For lease rights (with skimming), the price is now not even half of the price level that applied from the end of 2020 to the end of 2021. Then approximately €35,00 was paid for almost a year, compared to €16,00 now.