Geoeconomic Fragmentation and Commodity Markets

Jorge Alvarez, Mehdi Benatiya Andaloussi, Chiara Maggi, Alexandre Sollaci, Martin Stuermer and Petia Topalova

No 20451, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper studies the economic impact of commodity trade fragmentation. Using a novel production and trade dataset of 48 key commodities, we develop a partial equilibrium framework to identify the most vulnerable commodities to trade disruptions and assess the ensuing economic risks. Trade fragmentation can cause large price changes for many commodities, with minerals critical for the clean energy transition and selected agricultural commodities being the most vulnerable. The economic relevance of commodity trade fragmentation, measured by changes in consumer and producer surplus, varies across countries. However, offsetting effects across commodity exporting and importing countries, imply modest global surplus losses.

Keywords: Commodities (search for similar items in EconPapers)
JEL-codes: F11 F12 F14 F15 F17 F41 F42 F43 Q17 Q27 Q37 Q43 (search for similar items in EconPapers)
Date: 2025-07
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