Food prices – particularly prices of agricultural commodities used as a feedstock for biofuel production – have reached record highs in 2008. Within a period of slightly more than two years prices for staple food such as corn, soy, wheat, and vegetable oils have more than doubled. This price acceleration occurred at a time of surging crude oil prices and a rapid expansion of biofuel production, which relied nearly exclusively on feedstock from food crops. Consequently, the market development has triggered a controversial debate on the question whether the increase of agricultural prices in line with crude oil prices is a mere coincidence, due to stock market speculation, or result of a lasting integration of the agricultural and the energy sector. In the light of these uncertainties on an issue that could have a strong impact on global producers and consumers of food – particularly those in developing countries – the objective of this study is to analyse under which conditions agricultural commodity and crude oil markets could be linked in the future and in how far an integration of markets would affect developing countries.
The dissertation is divided into three parts: Part I analyses under which conditions prices in different commodities markets in general follow the same trend. Part II investigates whether a similar co-movement of prices is technically possible in food and crude oil markets, while Part III focuses on potential effects of such a co-movement of prices on developing countries.
Inhaltsverzeichnis (Table of Contents)
- PART I FRAMEWORK ON PRICE LINKS IN COMMODITY MARKETS
- PART II FACTORS LINKING THE CRUDE AND THE PLANT OIL MARKET
- PART III THE EFFECTS OF A CO-MOVEMENT OF CRUDE OIL AND AGRICULTURAL COMMODITY PRICES
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This dissertation investigates the relationship between crude oil and staple food prices, particularly in developing countries. It examines the potential link between biofuel production and the price dynamics of these commodities, exploring the implications for global food security and economic stability.
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The role of prices in commodity markets and factors contributing to price distortions.
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The analysis of cointegration relationships between different commodity markets, including crude oil, natural gas, and agricultural commodities.
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The impact of substitution effects between crude oil and plant oils on the supply and demand dynamics of both markets.
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The effects of a potential co-movement of crude oil and food prices on global food security, macroeconomic stability, and developing countries.
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The evaluation of policies aimed at mitigating negative effects on food security in developing countries.
Zusammenfassung der Kapitel (Chapter Summaries)
The dissertation is divided into three parts, each focusing on a specific aspect of the relationship between crude oil and food prices.
PART I: FRAMEWORK ON PRICE LINKS IN COMMODITY MARKETS
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INTRODUCTION: This chapter sets the stage by examining the role of prices in commodity markets and identifying factors that can lead to price distortions. It also introduces the concept of cointegration, a statistical technique used to analyze long-term relationships between time series.
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METHODOLOGY OF PART I: This chapter outlines the research questions and methodology used to analyze price links between different commodity markets. It details the selection of research studies included in the literature review and explains the concept of cointegration in more detail.
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PRICE LINKS BETWEEN SELECTED COMMODITY MARKETS: A LITERATURE REVIEW: This chapter presents a review of existing research on cointegration relationships between various commodity markets, including natural gas, crude oil, rubber, cotton, and competing crops.
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GENERAL FRAMEWORK OF PRICE LINKS BETWEEN DIFFERENT COMMODITY MARKETS: This chapter develops a general framework for understanding price links between different commodity markets, identifying factors that drive and limit cointegration, and discussing price-setting mechanisms in cointegrated markets.
PART II: FACTORS LINKING THE CRUDE AND THE PLANT OIL MARKET
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METHODOLOGY OF PART II: This chapter outlines the approach and methodology used to investigate the link between crude oil and plant oil markets. It discusses the strengths and limitations of this approach compared to other methodologies.
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THE STRUCTURE OF THE CRUDE AND THE PLANT OIL MARKET: This chapter examines the size and definition of the relevant markets for crude oil and plant oils, setting the stage for the analysis of substitution effects.
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SUBSTITUTION EFFECTS: This chapter analyzes the potential for substitution between crude oil and plant oils across various sectors, including transportation, heating, electricity, and the chemical industry. It also discusses the implications of these substitution effects on the supply side.
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CONCLUSION ON THE LINK BETWEEN CRUDE AND PLANT OIL PRICES: This chapter summarizes the findings on the link between crude oil and plant oil prices, highlighting the impact of market structure on price-setting mechanisms, the role of lower price boundaries, and the factors that limit cointegration between these markets.
PART III: THE EFFECTS OF A CO-MOVEMENT OF CRUDE OIL AND AGRICULTURAL COMMODITY PRICES
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THE EFFECTS OF A LINK BETWEEN CRUDE OIL AND FOOD PRICES: This chapter examines the potential impact of a link between crude oil and food prices on global food security and other macroeconomic factors. It discusses the implications for developing countries and explores potential policy responses.
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IMPACT ON INDUSTRIALIZED COUNTRIES: This chapter analyzes the potential impact of a co-movement of crude oil and food prices on industrialized countries, considering factors such as food price inflation and potential economic consequences.
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IMPACT ON BIOFUEL INDUSTRIES: This chapter examines the impact of the link between crude oil and food prices on the biofuel industry, including potential changes in biofuel production and market dynamics.
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IMPACT ON THE CRUDE OIL MARKET: This chapter analyzes the implications of the link between crude oil and food prices for the crude oil market, considering potential shifts in demand and supply dynamics.
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POLICIES TO MITIGATE NEGATIVE EFFECTS ON FOOD SECURITY: This chapter explores various policy measures aimed at mitigating the negative effects of a co-movement of crude oil and food prices on food security in developing countries. It discusses measures to reduce lower price boundaries, mitigate immediate impacts, and examines case studies on policy responses in specific countries.
Schlüsselwörter (Keywords)
The dissertation examines the complex interrelationships between crude oil and staple food prices, exploring concepts such as cointegration, substitution effects, and the implications for food security, particularly in developing countries. The research focuses on the potential influence of biofuel production on these markets and analyzes various policies aimed at mitigating negative impacts.
- Citar trabajo
- Katharina Averdunk (Autor), 2010, Analysis of the Link between Crude Oil and Staple Food Prices and Its Implications on Developing Countries, Múnich, GRIN Verlag, https://www.grin.com/document/177215
