rock phosphate rises to $110 us fob morrocco, page-52

Do you know how trading works? Or do you need me to point you to an analyst's report for you to work it out?

Speculation works like this. Lots of talk about biofuels and the demand going up because of it. Farmers panic and say, well I better stock up while the price is still here. Maybe I can on-sell some later at higher prices if I need. Seller A says its $x. Buyer says great. Seller next time gets cocky, he says $2x, buyer says great. Farmers get more panicky, seller gets more confident, price spirals.

This has in effect had nothing to do with supply not being able to meet demand. Its to do with the seller being able to demand what they think the market will bear. In this case based on fear that phosphate will continue rising. Farmers rely on phosphate, the fear can be quite real.

How does this require a cetnral exchange? In fact its realistically more likely to be more volatile in the absence of a controlled exchange.