Analysis Milk
Threatening government cloud halts phosphate trade
Finally, the phosphate market seems to realize what is hanging over its head. With the skimming of phosphate rights during trading alone, Dutch phosphate production will not come under the ceiling for next year; there is simply too little happening in the market. And why would you sell rights for a low price now, if a substantial generic discount is needed next year?
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Whatever everyone's considerations, suddenly no more phosphate rights are offered on the market. Because why sell rights now if there will be a generic discount next year? Better to be careful with what you have, is the idea. The sales price of purchase rights has also been quite low in recent months, which could be another reason not to sell.
In recent weeks, some traders have tried to find out whether higher prices would release more rights and have offered batches of phosphate for prices of up to €185 per kilo, about two and a half times as much as in recent months. So far, this has had little effect, because who would be interested in buying rights if they were now reduced by 30% or if they were to be significantly discounted next year? The market is now being tested again with prices of around €102 per right of purchase, but where are the transactions?
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Then there is 1 option left
Last year, phosphate production in cattle did not really go well either, according to CBS. With a total of 86,6 million kilos of cattle phosphate, 3,5 million more were produced than in the previous year, while a decrease to 78 million kilos would have been necessary
The total phosphate production of the livestock remained at around 148 million kilos, while the phosphate ceiling fell from 150 million last year to 135 million kilos this year, as agreed with Brussels, but this was not anticipated. The rising milk prices were undoubtedly partly responsible for this.
By skimming off during trading, the surplus could have been smaller, but that did not happen. The business termination scheme is also not very effective. Not many rights are taken away in this way either. As a result, there is actually only one option open to the cabinet: cut as of 2026. However annoying that may be.