Analysis of Interdependencies of (Fossil)-Energy, Bioenergy and Agricultural Commodity Prices
July 8, 2011http://dx.doi.org/10.1016/j.reseneeco.2010.07.004
(full access to article may require payment or subscription)
| |
A "lively debate" and controversy has reportedly resulted when the increase in food prices in 2007 to 2008 were attributed to the biofuels development (which was stimulated by rising fossil fuel prices). "The simultaneous increase in price volatility and agricultural commodity markets" raises the question about the possible link between fossil energy and agricultural prices.
Researchers from European Commission (DG Joint Research Centre) and Belgium (Catholic University of Leuven (LICOS) and the Economics and Econometrics Research Institute (EERI)) investigated the interdependencies of energy, bioenergy and agricultural commodity markets, using both theoretical and empirical approaches. In the theoretical approach, they extended existing models which developed a "vertical market integration model of ethanol, by-product, and corn markets." These extensions included (among others) the expansion of agricultural commodities from one to two, and the expansion of applicability to world markets (not only in the US). The empirical approach, which was based on cointegration analysis (related information below), "examined the existence of a long-run relationship between crude oil and agricultural commodity prices", by applying an error correction estimation procedure.
Some highlights of their results are: (1) empirical findings support the theoretical hypothesis that the prices for crude oil and agricultural commodities are interdependent, (2) an increase in oil price by 1$/barrel increases the agricultural commodity prices between $0.10/tonne and $1.80/tonne, (3) the indirect input channel of price transmission is found to be small and statistically insignificant, which is contrary to theoretical predictions. The full paper is published in the journal, Resource and Energy Economics (URL above).
Related information on co-integration analysis: http://www.econ.ku.dk/okokj/papers/dfhkjfnl.pdf
http://www.econ.ku.dk/okokj/papers/kjdhengii.pdf
| |
Biotech Updates is a weekly newsletter of ISAAA, a not-for-profit organization. It is distributed for free to over 22,000 subscribers worldwide to inform them about the key developments in biosciences, especially in biotechnology. Your support will help us in our mission to feed the world with knowledge. You can help by donating as little as $10.
-
See more articles:
-
News from Around the World
- Global Seed Market Valued at $37 B
- $170 Million Expanded Global Maize Research Program
- IFPRI Discusses Trade Effects of Strict Info Requirements for GM Commodities
- Kenya to Allow GM Maize Imports
- Scientist Reviews Adoption of Biotech Crops in Africa
- Gene Flow May Help Plants Adapt to Climate Change
- General Mills Grant Will Help Vanilla Farmers and Tropical Forests
- Beachy: GM Approval Process Must be Reviewed
- HT Soybean Highest Adopted Biotech Crop in the U.S.
- USDA Awards Grants to Mitigate Climate Change Effects
- BIO's Strategic Initiative to Speed Scientific Breakthroughs
- China Establishes National Lab for Super Grain
- CAS Scientist Reports Advances in Dev't of GM Herbicide Resistant Hybrid Rice in China
- New Crops for the Future Research Centre Planned in Malaysia
- First Biotech Park in Punjab
- China's MoA Updates "GMO Trainers"
- EU Parliament Paves Way for GMO Crop Bans
- EU Policy-making Should be on Scientific Evidence of GM Crops
- GM Maize MIR162 Approved for Food in Russia and the Customs Union
- French ‘Green Biotechnology' to Serve the Plants of Tomorrow
-
Research Highlights
- Scientists Identify Maize Proteins Causing Aflatoxin Production
- Genes from Chickweed Increase Resistance to Fungi
- Engineering Broad-spectrum Resistance Against RNA Viruses in Potato
-
Beyond Crop Biotech
- Termites' Digestive System Could Act as Biofuel Refinery
-
Announcements
- Coexistence Workshop in Washington DC
- Sustainable Use of Pesticides and Integrated Pest Management in East-Central Europe and the Baltics
- Sixth International Congress on Legume Genetics and Genomics 2012, Hyderabad
- Biosafety Brazilian Congress
- ABIC Conference in South Africa
-
Resources
- The Food Security Policy Context in Brazil
- GAIN-FAS Report on Biotechnology in Italy, 2011
- China's MoA Issues Q&A About GMOs
-
Read the latest: - Biotech Updates (April 30, 2025)
- Gene Editing Supplement (April 30, 2025)
- Gene Drive Supplement (February 22, 2023)
-
Subscribe to BU: - Share
- Tweet