Agricultural Commodities as Energy Carriers
"The food crisis." By the first half of 2008 agricultural commodity prices reached their highest levels in 30 years. Agricultural commodities are particularly sensitive to changes in demand or supply, making the welfare effects of changes large. Soaring food prices was on the political agenda world wide, and the world faced a situation that could augment the adverse effects of poverty. Several explanations of the serious situation were presented, however, the quantitative research within this field has been limited. This book provides insight in the price relationships between various agricultural commodities, on one hand, and energy prices on the other. Long run relationships, short run dynamics and structural breaks are examined with a time series econometric approach based on data from 1995 - 2008. This book provides a first-class platform for specification of structural models that can quantify the underlying reasons behind the new structure and linkages better than time series econometric methods. The analysis should add value for those trying to understand the development in the price formation of the agricultural commodity markets the last decade.