Abstract
Purpose: Increasing food prices as a result of food crisis in 2007-2008 increased interest in this relationship in the literature. The objective of this research is to establish a causal link between crude oil and food prices by examining the prices of various food commodities, including wheat, sunflower, soybean, cotton, and corn. Design/Methodology/Approach: To explore the relationship between crude oil and food prices, a range of methodologies were employed, including the Augmented Dickey-Fuller test, Granger causality test, Johansen Cointegration analysis, vector autoregression model, vector error correction model, action and reaction analysis, and variance decomposition. Findings: The findings highlight both short- and long-term connections between the variables, as well as the influence of food prices on crude oil during the second sub-period. Originality/Value: Studies investigating the relationship between food prices and crude oil were mostly conducted through “energy”. The difference of this study is the fact that it draws attention to the impact of crude oil on food prices next to the effect of food product prices accepted as internal variable in the literature on crude oil.
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