Technical Report Kiel Institute for the World Economy (IfW), 2014. 00011Paper abstract bibtex
Being of crucial importance for agricultural production and also having experienced significant price volatility, phosphate and its future availability have drawn growing attention from both academics and the public over the last years. This paper overviews the recent literature and data on the availability of phosphorus and discusses the economic aspects of phosphate scarcity by describing major price determinants of the global phosphate market. We show that past price fluctuations of phosphate rock and phosphate fertilizers are not a reflection of physical phosphate rock depletion but rather attributable to numerous other demand- and supply-side factors. Given the current reserve estimates for phosphate rock, neither an exhaustion of global reserves nor a peak event is likely to occur within this century. However, these estimates are subject to a significant degree of uncertainty. Moreover, the global distribution of phosphate production and reserves is highly skewed and has the potential to pose a threat to food security in developing countries through factors such as the volatility of the phosphate rock price or price setting by suppliers with significant market power.