Spatial Integration Analysis of the Regional Urea Fertilizer Markets in the Philippines

Abstract

Fertilizer, an important production input, accounts for a significant share of the total production cost of some crops. However, data on fertilizer’s retail price show that the price levels considerably vary across regions. This study finds that behind such disparity is the poor condition of the domestic transport infrastructure, not the alleged presence of localized monopolies. The absence of segmentation and the sheer number of players lessened the likelihood of localized monopolies as being the source of regional price disparities.