The phosphate market has been practically over the top in recent weeks. Anyone wanting a comparison of the prices currently being paid – up to €230 per kilo – needs to go back to the early years of the phosphate trade. Phosphate is scarce, sought after, and extremely expensive.
Normally, December is the busiest month for the phosphate trade, as everyone tries to get some last-minute deals done. This year, that doesn't seem likely, simply because there won't be much left to sell. "All the phosphate traders will be away on their ski holidays in December this year," one of them jokes. It might be a nice change from the usual routine of that month.
Phosphate is in high demand because milk production has been high this year, resulting in increased manure production. However, many farms don't have enough phosphate rights to justify this, and selling cows isn't easy yet. Therefore, additional rights are being purchased. This isn't within everyone's reach, especially with current prices of €225 to €230 per kilo for purchase rights, or up to €90 per kilo for leases with skimming. However, there's still a substantial group of dairy farmers who, even at current prices, are still willing to pay for a batch of purchase rights.
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The question is how long this will continue. Leasing rights for larger quantities are very limited. Consignments up to 100 kilos are frequently and readily traded, and even at the reasonable price of €4,00 per kilo. However, this price is expected to rise rapidly. Leasing rights are still available, but not in unlimited quantities. Moreover, purchasing a consignment of leasing rights quickly becomes a significant investment.
It's also worth asking how long such an investment will benefit someone. It's quite possible that a general discount will be implemented next year. So far, however, there's been little concern about this in the trade.