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Modeling Global Trade in Phosphate Rock within a Partial Equilibrium Framework

Nikolay Khabarov () and Michael Obersteiner ()
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Nikolay Khabarov: Ecosystems Services and Management Program (ESM), International Institute for Applied Systems Analysis (IIASA), Schlossplatz 1, Laxenburg A-2361, Austria
Michael Obersteiner: Ecosystems Services and Management Program (ESM), International Institute for Applied Systems Analysis (IIASA), Schlossplatz 1, Laxenburg A-2361, Austria

Sustainability, 2018, vol. 10, issue 5, 1-15

Abstract: Against the background of combined population and consumption growth, the global sustainable development agenda foresees limits to the expansion of agricultural land. The application of fertilizer is necessary to replenish soil nutrients and keep crop yields high. Phosphate rock (PR) is the main raw material for the production of commercial phosphorus fertilizers. The international PR market is highly concentrated in terms of reserves and supply: a few countries export the major share of all PR traded globally. As many countries are highly dependent on phosphorus import, the modeling of international PR trade and thus exploration of what-if scenarios is of great interest. For modeling purposes, we employ the partial equilibrium framework. The model is driven by a subset of the United Nations (UN) Comtrade database at a yearly time step spanning the period 1997–2016. The only inputs to the model are slope coefficients of demand–supply curves. The transportation costs are internalized by creating a costs ensemble on the basis of historical data. While reasonably sensitive to its inputs, the model fits very well to reported global annual traded quantities and prices and considerably improves per-trade-partner quantity estimates as compared to simple period-averaging approaches. This is the first application of a partial equilibrium approach to global PR market modeling, including validation.

Keywords: phosphate rock; international trade; partial equilibrium (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2018
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