That’s fair about wheat import/exports – I don’t quite follow this guy’s estimate of only a 75% reduction in wheat exports from Ukraine and Russia, and plausibly it could be a lot worse.
The phosphate problem must depend on elasticity of phosphate supply (and a little of demand, though I checked and less than 10% of phosphate is used for non-agricultural industry, so there’s probably not a lot that can be substituted from other uses). I found conflicting accounts of whether Russia was the largest phosphate exporter, but like wheat, it’s not the largest phosphate producer. It produces about 13 million tons of phosphate, 5.6% of the world total, so I don’t find that immediately alarming – maybe it’s not too hard to increase phosphate mining by 5%? I wasn’t able to quickly find out how much of Russia’s production that it exports. I also couldn’t quickly find anyone giving an estimate of phosphate supply elasticity.
This paper says “Between 1961 and 2014 there have been two instances when the global phosphate rock prices spiked, in mid-1970s and 2007–2008 (Fig. 3a). Both events are linked to an economic trigger. The first instance was during the first oil crisis, and it was driven by the increase in energy prices (Mew, 2016). The second one is attributed to a combination of oil price increase, higher labour costs and insufficient mining capacity (Scholz et al., 2014).”
This chart shows up-to-date phosphate prices. It would be the one to watch to see how bad the phosphate shortage is getting. It shows a big spike in 2008 – about three times the current price. I don’t remember phosphate shortages in 2008 news, nor mass starvation, so I think we’re probably okay with prices under three times the current price.
I should have said 40% of the feedstock for exported fertilizer. I also should have explicitly noted that because a lot of wheat is still produced locally to where it’s consumed, the famine risk is limited to places that are dependent on wheat imports.
Unfortunately there are plenty of those. And they are generally places that are poor by other measures as well, making coping with economic shocks more fraught.
Your argument that 3X current phosphate prices is tolerable seems sound. On the other hand, anything that has to be mined has inelastic supply because the cost of the capital equipment—and in many countries the cost of the regulatory approvals—is so high.
Russia dropping entirely from the phosphate market would be wiping out ~2.3 years of projected growth. Significant? Yes. Catastrophic? I don’t think so offhand.
That’s fair about wheat import/exports – I don’t quite follow this guy’s estimate of only a 75% reduction in wheat exports from Ukraine and Russia, and plausibly it could be a lot worse.
The phosphate problem must depend on elasticity of phosphate supply (and a little of demand, though I checked and less than 10% of phosphate is used for non-agricultural industry, so there’s probably not a lot that can be substituted from other uses). I found conflicting accounts of whether Russia was the largest phosphate exporter, but like wheat, it’s not the largest phosphate producer. It produces about 13 million tons of phosphate, 5.6% of the world total, so I don’t find that immediately alarming – maybe it’s not too hard to increase phosphate mining by 5%? I wasn’t able to quickly find out how much of Russia’s production that it exports. I also couldn’t quickly find anyone giving an estimate of phosphate supply elasticity.
This paper says “Between 1961 and 2014 there have been two instances when the global phosphate rock prices spiked, in mid-1970s and 2007–2008 (Fig. 3a). Both events are linked to an economic trigger. The first instance was during the first oil crisis, and it was driven by the increase in energy prices (Mew, 2016). The second one is attributed to a combination of oil price increase, higher labour costs and insufficient mining capacity (Scholz et al., 2014).”
This chart shows up-to-date phosphate prices. It would be the one to watch to see how bad the phosphate shortage is getting. It shows a big spike in 2008 – about three times the current price. I don’t remember phosphate shortages in 2008 news, nor mass starvation, so I think we’re probably okay with prices under three times the current price.
I should have said 40% of the feedstock for exported fertilizer. I also should have explicitly noted that because a lot of wheat is still produced locally to where it’s consumed, the famine risk is limited to places that are dependent on wheat imports.
Unfortunately there are plenty of those. And they are generally places that are poor by other measures as well, making coping with economic shocks more fraught.
Your argument that 3X current phosphate prices is tolerable seems sound. On the other hand, anything that has to be mined has inelastic supply because the cost of the capital equipment—and in many countries the cost of the regulatory approvals—is so high.
See also my sibling comment at https://www.lesswrong.com/posts/CLXkgEerPi9MpJCem/moloch-and-the-sandpile-catastrophe?commentId=rsJMhBmsQjxZhZLHL
Russia dropping entirely from the phosphate market would be wiping out ~2.3 years of projected growth. Significant? Yes. Catastrophic? I don’t think so offhand.