Deconstructing fertilizer price spikes: Evidence from Chinese urea fertilizer market

IF 6.8 1区经济学 Q1 AGRICULTURAL ECONOMICS & POLICY

Food Policy Pub Date : 2025-02-28 DOI:10.1016/j.foodpol.2025.102829

Zhepeng Hu , Lei Yan , Jinghong Yuan , Xiaoli Etienne

{"title":"Deconstructing fertilizer price spikes: Evidence from Chinese urea fertilizer market","authors":"Zhepeng Hu , Lei Yan , Jinghong Yuan , Xiaoli Etienne","doi":"10.1016/j.foodpol.2025.102829","DOIUrl":null,"url":null,"abstract":"<div><div>Recent fertilizer price spikes in 2021–2022, coupled with government interventions by major exporting countries, have raised global concerns about food security. This study investigates the key drivers of urea prices in China—the world’s largest producer and a major exporter. First, we analyze price transmission between China’s domestic spot and export urea markets, finding no cointegration even prior to the export restrictions introduced in October 2021. Next, we employ a structural vector autoregression model to examine domestic urea price spikes, using a heteroskedasticity-based identification strategy that allows for smoothly transitioning covariances. We decompose urea prices into four structural shocks: supply shocks driven by energy price changes, demand shocks linked to crop price fluctuations, export demand shocks, and market-specific idiosyncratic shocks unrelated to the first three. The findings reveal that rising energy costs and idiosyncratic factors were the main drivers of urea prices in China from 2018 to 2023, while shocks to corn prices and export demand had a smaller impact. Overall, the results indicate that recent export restrictions have had limited influence on domestic urea prices, calling into question the effectiveness of China’s October 2021 export restrictions as a price stabilization measure.</div></div>","PeriodicalId":321,"journal":{"name":"Food Policy","volume":"133 ","pages":"Article 102829"},"PeriodicalIF":6.8000,"publicationDate":"2025-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Food Policy","FirstCategoryId":"97","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0306919225000338","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"AGRICULTURAL ECONOMICS & POLICY","Score":null,"Total":0}

引用次数: 0

Abstract

Recent fertilizer price spikes in 2021–2022, coupled with government interventions by major exporting countries, have raised global concerns about food security. This study investigates the key drivers of urea prices in China—the world’s largest producer and a major exporter. First, we analyze price transmission between China’s domestic spot and export urea markets, finding no cointegration even prior to the export restrictions introduced in October 2021. Next, we employ a structural vector autoregression model to examine domestic urea price spikes, using a heteroskedasticity-based identification strategy that allows for smoothly transitioning covariances. We decompose urea prices into four structural shocks: supply shocks driven by energy price changes, demand shocks linked to crop price fluctuations, export demand shocks, and market-specific idiosyncratic shocks unrelated to the first three. The findings reveal that rising energy costs and idiosyncratic factors were the main drivers of urea prices in China from 2018 to 2023, while shocks to corn prices and export demand had a smaller impact. Overall, the results indicate that recent export restrictions have had limited influence on domestic urea prices, calling into question the effectiveness of China’s October 2021 export restrictions as a price stabilization measure.

查看原文本刊更多论文

解构肥料价格飙升：来自中国尿素肥料市场的证据

近期2021-2022年化肥价格飙升，再加上主要出口国的政府干预，引发了全球对粮食安全的担忧。本研究调查了中国尿素价格的主要驱动因素，中国是世界上最大的生产国和主要出口国。首先，我们分析了中国国内现货和出口尿素市场之间的价格传导，发现即使在2021年10月实施出口限制之前也没有协整。接下来，我们采用结构向量自回归模型来检验国内尿素价格峰值，使用基于异方差的识别策略，允许协方差平滑过渡。我们将尿素价格分解为四种结构性冲击：由能源价格变化驱动的供应冲击、与作物价格波动相关的需求冲击、出口需求冲击以及与前三种冲击无关的市场特异性冲击。研究结果显示，能源成本上涨和特殊因素是2018年至2023年中国尿素价格的主要驱动因素，而玉米价格和出口需求的冲击影响较小。总体而言，结果表明，最近的出口限制对国内尿素价格的影响有限，这让人质疑中国2021年10月出口限制作为价格稳定措施的有效性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Food Policy 管理科学-农业经济与政策

CiteScore

11.40

自引率

4.60%

发文量

128

审稿时长

62 days

期刊介绍： Food Policy is a multidisciplinary journal publishing original research and novel evidence on issues in the formulation, implementation, and evaluation of policies for the food sector in developing, transition, and advanced economies. Our main focus is on the economic and social aspect of food policy, and we prioritize empirical studies informing international food policy debates. Provided that articles make a clear and explicit contribution to food policy debates of international interest, we consider papers from any of the social sciences. Papers from other disciplines (e.g., law) will be considered only if they provide a key policy contribution, and are written in a style which is accessible to a social science readership.