Did the Fertilizer Cartel Cause the Food Crisis?

17 Pages Posted: 8 Dec 2014 Last revised: 17 Dec 2014

Hinnerk Gnutzmann

Leibniz Universit├Ąt Hannover - Faculty of Economics and Management

Piotr Spiewanowski

Vistula University; Polish Academy of Sciences - Institute of Economics (INE PAN)

Date Written: December 6, 2014

Abstract

Food commodity prices escalated during the 2007/2008 food crisis, and have scarcely fallen since. We show that high fertilizer prices, driven by the formation of an international export cartel as well as high energy prices, explains the majority of the recent price spikes. In particular, we estimate the pure fertilizer cartel effect explains more than 60% of crisis food price increases. While population growth, biofuels, high energy prices and financial speculation doubtlessly put stress on food markets, our results help to understand the severity and sudden emergence of the crisis and suggest avenues to prevent its repetition.

Keywords: food crisis, fertilizer, cartel, competition policy

JEL Classification: F01, L04

Suggested Citation

Gnutzmann, Hinnerk and Spiewanowski, Piotr, Did the Fertilizer Cartel Cause the Food Crisis? (December 6, 2014). Available at SSRN: https://ssrn.com/abstract=2534753 or http://dx.doi.org/10.2139/ssrn.2534753

Hinnerk Gnutzmann (Contact Author)

Leibniz Universit├Ąt Hannover - Faculty of Economics and Management ( email )

Koenigsworther Platz 1
Hannover, 30167
Germany

HOME PAGE: http://www.gnutzmann.info

Piotr Spiewanowski

Polish Academy of Sciences - Institute of Economics (INE PAN) ( email )

Palace of Culture and Science
Pl. Defilad 1
Warsaw, 00-901
Poland

Vistula University ( email )

Stoklosy 3
Warsaw, 02-787
Poland

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