Phosphate supply security for importing countries: Developments and the current situation

Abstract

Phosphorus's essentiality for all life on Earth is beyond doubt. As one of the three major macronutrients, it is a crucial building block of modern-day mineral fertilizers and, thus, an essential production factor for global food security. Its almost-exclusive primary sources are phosphate-rock deposits of either sedimentary or igneous origin. The currently known deposits are widely scattered over the globe in large numbers but not necessarily in commercially feasible phosphate-rock quantities. Europe, in particular, possesses negligible considerable reserves; currently, only one Finnish igneous mine is in operation. Thus, phosphate imports are inevitable. Countermeasures like to foster phosphorus recycling from wastewater systems, will reduce rather than substitute imports. Phosphate trade of any form relies on bilateral commercial agreements as it is not traded on commodity exchanges. Therefore, questions regarding supply security and, particularly, the safeness of supply for import-dependent countries, must also address the issues of market concentration, the dynamic reserve–resource situation, and respectively their development over time. We provide a state-of-the-art fundamental analysis all along the supply chain by applying the Hirschman-Herfindahl Index (HHI) to quantify market concentrations as well as reserve-to-production ratios to evaluate developments over recent decades. Thereby, we overcome the unfavorable nature of these static measures. Results suggest medium to highly concentrated markets for the production of phosphate rock, phosphoric acid, and phosphate fertilizers (MAP, DAP) with increasing trends for the overall supply chain. However, these findings should not be interpreted as alarming developments for import-dependent regions, given that the export-market concentrations for phosphate fertilizers have shown significant decreases since the early 1980s.