Abstract
The last ten years have seen with intense price volatility in the commodities markets, especially within the energy sector. This fluctuation has had serious implications on markets all over the world. From an increased dependence on renewable energy sources, to potential climate change impacts on global markets, commodities markets continue to face unpredictable and explosive price instabilities. In 2015, Brazil experienced an unprecedented increase in the price of ethanol. It is believed that due to that increase, Brazil consequently witnessed a surge in food prices. The primary objective of this paper is to quantitatively analyze the relationship between ethanol production and agricultural commodity prices. Our analysis confirmed that the increase in ethanol production had an impact on the price of sugar, wheat, corn and barley. This conclusion was drawn after conducting a series of statistical tests, unit roots and price pairing cointegration estimates. The multitude of tests that were conducted demonstrates a clear link between food price fluctuations in Brazil and ethanol price spikes.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
