Global food crisis and crude oil price changes: Do they share common cyclical features?

Abstract

This paper explores shared trends and shared cycles between crude oil market and global food commodity markets for wheat, rice, sugar, beef, coffee and groundnut. The results of the paper indicate that there is no evidence of shared trend and common cycle between crude oil market and each of the food commodity markets, suggesting that each market responds differently to cycle generating shocks. This result implies that change in food commodity prices do not mimic systematically the cyclical behaviour in crude oil price changes. Thus, non-oil factors, such as the speculative activities in commodity future markets, may have more important role in recent years food commodity price explosion.