Commodity Sector Research Articles

OIL VOLATILITY-OF-VOLATILITY AND TAIL RISK OF COMMODITIES

We examine the information content of oil volatility-of-volatility (VOV), constructed from the past 1-month OVX (implied volatility in crude oil market), on the expected tail risk of commodities. Specifically, we find oil VOV predicts 1-step-ahead tail risks of Energy, Precious Metals, Agriculture, Livestock sectors and the Aggregate Commodity sector (GSCI) for both in-sample and out-of-sample. Our results indicate the important role of crude oil in overall commodity markets by incorporating forward-looking information of OVX. Our findings are robust and complement the strand of literature about the leading role of crude oil in commodity markets.

The Effects of Pond Type and Water Quality Dynamics on Vannamei Shrimp Growth: A Dummy Regression Analysis

Vannamei shrimp is one of Indonesia's leading aquaculture sector commodities due to its high survival rate, short cultivation time, and disease resistance. Vannamei shrimp cultivation in Indonesia adopts an intensive system favoured for high productivity. In intensive cultivation systems, shrimp ponds typically utilize concrete or high-density polyethylene (HDPE) ponds. Each type has its own positive and negative side that affects the growth and production of Vannamei shrimp. Apart from the type of pond, water quality also played an important role in the growth of Vannamei shrimp. Water quality is one of the important factors in intensive shrimp cultivation. Pond type is categorical data and has a nominal measurement scale, while water quality is numerical data with a ratio measurement scale; ordinary regression analysis is unsuitable for analyzing the effect of pond type and water quality on the growth of Vannamei shrimp. Therefore, a dummy regression model accommodates these measurement scale differences. This research aims to determine the effect of different types of ponds and water quality dynamics on the growth of Vannamei shrimp and to select the best type of pond for intensive cultivation of Vannamei shrimp. Additionally, it aims to identify the water quality parameters that most influence the growth of Vannamei shrimp so that it can serve as a reference for Vannamei shrimp farmers to achieve high productivity efficiently. The study was conducted from November 2022 to January 2023 in Banyuwangi Regency, East Java Province, Indonesia. There are three concrete ponds and 10 HDPE ponds. The research method employed in this study is a survey method utilizing simple random sampling. The parameters in this research are the quality of cultivation water, including pH, temperature and dissolved oxygen (DO). The water samples taken are then measured for water quality in the laboratory. The results of this study indicate that the average values for water quality are still within the optimal range. The average ABW in HDPE and concrete ponds ranges from 2.30 to 9.39 grams per shrimp and 2.22-9.73 grams per shrimp. Based on the study's results, it can be concluded that different pond types and water quality dynamics, specifically pH and temperature, affect shrimp growth based on ABW. However, when considering SGR values, the type of pond does not have a significant impact. The water quality parameters that affect SGR are pH and temperature.

An Analysis of Bilateral Trade Relation between Turkey and Russia: Challenges and Opportunities of Russia-Ukraine War

Purpose: This study examines Turkey's bilateral trade intercourse with Russia in order to identify potentialities and problems for Turkey caused by the Russia-Ukraine War. Method/Design/Methodology/Approach: In the course of the study, with the help of descriptive statistics and calculations of trade indices such as trade intensity and trade complementarity indices, the current state of Russian-Turkish trade was examined. Afterwards, commodity sectors in which supply is expected to fall due to international companies’ suspension of businesses were identified. Next, the revealed comparative advantage index and its dynamic form were calculated to assess Turkey's potentialities to export commodities of the identified sectors to Russia and to highlight commodities groups where export policy should be improved. Thus, the study considers Russia and Turkey not as competitors, but as partners. Findings: It has been concluded that the countries have tight-connections and, to a certain extent, are dependent on one another. Both Russia and Turkey can benefit from further intensifying bilateral trade and improving partnership in other spheres as well. Originality: There is substantial literature comparing Russia and Turkey with other countries, trade blocks or with each other, mainly these two countries are counterposed from a competition perspective. This article, on the contrary, evaluates how cooperation and bilateral trade can improve the economic situation of both Russia and Turkey.

Commodity prices and production networks in small open economies

We study the role of domestic production networks in the transmission of commodity price fluctuations in small open economies. First, we present a tractable model of a small open economy's production network to explain sectoral propagation patterns. We demonstrate that the domestic production network is crucial in shaping the propagation of commodity prices. Using a panel of 31 sectors across 9 small open economies, we empirically confirm the model's predictions. Next, we construct a dynamic model of a small open economy featuring a production network to study the macroeconomic importance of the network structure in shaping both aggregate and sectoral responses to commodity price shocks. We show that: (i) the network-adjusted labor share of the commodity sector, rather than the sector's size, is key to understanding the real wage's response to commodity price fluctuations; and (ii) non-unitary elasticities of substitution in production are crucial for understanding the cross-sectional implications of these fluctuations.

Kutafuta Maisha: Connections Between Agency and Structure in Makonde Migratory Labour from Mozambique to Tanzania (ca. 1907-1964)

The drive for making colonial territories “profitable” through various means, such as commodity extraction, got entangled with complex events that stood well beyond the intervening capacity of colonial administrators, and labour migration was no exception. This article analyses Makonde migration from Northern Mozambique toward sisal plantations in neighbouring British Tanganyika during the twentieth century and argues that the interweaving of written and oral sources renders two contrasting pictures: one of an orderly planned commodity sector mediated by industrial pundits and sustained by a rhetoric of colonial “development”; and another of spontaneous, haphazard yet rational life decisions undertaken by migrant men and women. We challenge the conventional take on African labour migration by discussing a much more complex picture that shows how the colonial labour migration system had to address the migrants’ needs and how migrants successfully subverted coercive structures for their benefit, and by doing so, Makonde migrants established their own transformative connections with global phenomena that outreached their participation in commodity production chains

Review of the Paradigm on the Role of Print Media in Influencing Public Health

This paper explores important issues related to media research in the context of public health debates and emphasises the requirement of a research plan including media production based on political sciences. Consensus is that via topic selection and presentation, the media significantly impacts public health dialogues and influences public opinions. Often reflecting the interests of strong stakeholders, the way the media presents health challenges, their causes, and solutions greatly influences public health debate. But modern studies often overlook the complex processes of media production necessary for knowledge of how political economics, power, and culture impact these debates. Media production is not just the consequence of linked networks, occupational practices, technology, and institutional contexts reflecting ideological convictions; it is also the output of newsrooms, revealed by a thorough study of media production. Examining non-communicative diseases (NCDs), a major worldwide health concern affected by unsustainable commodity sectors, this viewpoint is very vital. Public health studies have not yet completely revealed the media tactics used by businesses pushing negative items such alcohol, tobacco, and processed foods. Underexplored is the impact of these sectors on public health policy discussions mediated via media coverage.

Impacts of automated trucks on U.S. freight movements: application and enhancement of the random-utility-based multiregional input-output model

ABSTRACT Fully automated trucks (ATrucks) will impact the US freight flow patterns, due to time and cost savings compared to human-driven trucks (HTrucks). This paper advances the random-utility-multiregional input-output (RUBMRIO) model to have explicit mode’s commodity-pricing impacts and predicts impacts of ATrucks on freight mode and origin choices across 20 commodity sectors across US. Assuming ATrucks’ operating cost to be 60% of that for HTrucks, results suggest that time and cost savings from the use of ATrucks not only accommodate the need to acquire high-value goods from more closer locations but also facilitates the transportation of goods with the same value from farther away. HTrucks’ shares diminish as distance rises, with ATrucks’ mode share in transported value fairly stable (at 50% across all distances). Rail’s share is minimal for shorter distances but rises to approximately 20% for trips longer than 250 miles. Overnight-travel time savings raise the total value and ton-miles of goods transported by ATrucks, peaking at an increase of 11% for trips between 500 and 750 miles. ATrucks transport three times the ton-miles of HTrucks with an 80% cost reduction and still double the ton-mileswith a 40% increased cost, thanks to time savings.

Mapping sustainable investing: Exploring ambiguities and consistencies among sustainable indices

Sustainable investing is perceived as a confusing black-box by many researchers, practitioners, and investors. Terminology, metrics, approaches, disclosure standards are quickly evolving, while the empirical evidence provides a growing number of mixed results. In this paper, we examine the composition, performance, and the risk-return profile of reference sustainable indices for the asset management industry, distinguishing between ethical and socially-responsible, faith-based, ESG and climate ones. Our findings reveal consistent investment trends across various sustainable indices, impacting their overall performance. Specifically, our analysis highlights a prevalent inclination towards large and growth-oriented companies, as well as a persistent focus on technology, financials, and commodity sectors. These results provide valuable insights for investors, asset managers, and index providers regarding the potential misalignment between an investment vehicle's labeling and its actual composition, and the implications this discrepancy might have on investors' expectations.

Commodity sectors and factor investment strategies

Commodity sectors exhibit heterogeneous characteristics owing to their limited supply and demand. To analyze these sector heterogeneities, we construct commodity factor portfolios without using a single sector and investigate whether commodity sectors play an important role in determining the risk premiums of commodity futures. We construct an equally weighted portfolio that includes momentum, basis, basis momentum, value, and hedging pressure while excluding the precious metal sector. We find that this portfolio generates a Sharpe ratio of 1.67. This finding indicates that the special status of precious metals employed as hedging tools for other assets distorts the performance of commodity factors.

Non-Technical Skills Needed for the Current and Next-Generation Agricultural Workforce

This study highlights the need to recognize and train agricultural workers in essential non-technical skills to enhance workforce effectiveness and sustainability within the agriculture sector. Focused on the Gippsland region of Victoria, Australia, the research involved initial semi-structured interviews with three agricultural training managers to identify relevant non-technical skills for food and fibre workplaces. Representatives from twenty Gippsland food and fibre businesses were then surveyed to rate these identified skills across different workforce segments: (a) seasonal workers, (b) entry-level workers, (c) supervisors, and (d) managers. Descriptive statistics, including frequency counts, means, and standard deviations, were used to analyze the responses. Employer ratings for skill needs were weighted against the number of workers employed in each workforce segment. Key non-technical skills such as communication, teamwork, problem-solving, and cross-cultural competence were found to be in high demand, particularly among seasonal and entry-level workers. However, there is a significant gap between the importance of these skills and their prioritization in accredited training programs. Addressing this gap is crucial for investing in a skilled and adaptable agricultural sector that is competitive and sustainable. The theoretical understandings derived from this study’s results warrant further research and replication in diverse commodity sectors and locations within Australia and internationally.

Regional Superior Products as The Key to Sustainable Food Security in Jember Regency, Indonesia

Understanding the development planning priorities and commodity sub-sector in Jember Regency, it is necessary to acknowledge the prime sub-sector and the primary commodity sector in Jember Regency. Regional products should be able to prioritize the sub-sector and the preferred crop, prime and which is considered a sub-sector basis to optimize the food security in the region. The research was conducted from 2016 to 2021 by several analysis methods: Location Quotient, Analytical Hierarchy Process, and Exponential Comparative Method. The criteria used are based on seven normative criteria. The results showed that plantation and horticultural crops were the basis of sectors in the 2016-2020 survey, with values of 2,1036 and 1,3879. Based on the analytical hierarchy process and exponential comparative method analysis, it is seen that there are many leading commodities in the agriculture sector. These commodities are orange fruit, durian, banana, mushrooms, chili, coffee, and sugarcane.

Colombia's economic relations with China: The role of economics and politics in trade, investment, and economic agreements

AbstractOver the past two decades, many Latin America and Caribbean (LAC) countries have deepened their economic relationship with China by accepting large amounts of Chinese investments and signing up for China's Belt and Road Initiative (BRI). However, Colombia has not followed such a path. Using cross‐border data on trade, investment, and economic agreements, this article demonstrates that Colombia's under‐engagement with China is driven by Colombia's lower competitiveness in the commodities sectors, where Chinese demand for LAC products is highest. Colombia's limited competitiveness has led to lower exports to China and lower amounts of Chinese investment. The low level of bilateral economic activities has resulted in a lack of incentives for Colombia to sign economic agreements with China, as well as general public skepticism toward China and more favorable attitudes toward the United States even though this trend has been on the decline since 2016. Colombia can benefit from strengthening ties with China, without distancing itself from the United States, on issues pertaining to energy transition and the development of rural infrastructure, which will help reduce inequality and broaden export diversification in the medium to long term.

A comparison of deflation methods for carbon footprint calculations using Japanese data

An embodied CO2 emissions intensity database estimated from input–output data at current prices is now available in Japan. This study compares two non-survey methods: The double-deflation (DD) method and an elaborated approach combining the DD method with the generalized RAS method to deflate an input–output table (IOT). We used these methods to estimate new datasets of embodied CO2 emission intensity data in Japan, utilizing Japan's IOTs for 2005, 2011, and 2015 at constant prices in 2015. Furthermore, we compare the estimated data of 367 commodity sectors for a specific year (2005 or 2011). The results reveal that the intensity for certain aggregated sector groups, such as non-ferrous metals and finance and insurance, exhibits higher uncertainty owing to the extreme price homogeneity assumption associated with the DD method. Consequently, we recommend that life-cycle-assessment practitioners use an open database when analyzing changes in the carbon footprint of products over time.

ANALISIS KONTRIBUSI SEKTOR KOMODITAS KARET TERHADAP PERTUMBUHAN EKONOMI KABUPATEN BANYUASIN TAHUN 2016-2021

This research aims to analyze the contribution of the rubber commodity sector to the economic growth of Banyuasin Regency from 2016 to 2021, along with the specialization level of this sector. The study employs a quantitative research method designed to illustrate correlations with appropriate reliability and priority levels. Analytical methods utilized include Location Quotient (LQ) and Shift-share (SS). Secondary data for the research are sourced from the Central Statistics Agency (BPS) of Banyuasin Regency and South Sumatra Province. The findings reveal that, among the 21 sub-districts in Banyuasin Regency, a majority exhibit rubber plantation as their primary sub-sector, evident from the average LQ calculations. The LQ and Shift-share results, where LQ>1 and PPW>0, indicate that 10 sub-districts serve as the base sectors for the rubber commodity, positively impacting the economy of Banyuasin Regency. Moreover, six sub-districts with LQ>1 and PPW<0 show that high production values and rubber plantation mobility contribute negatively due to less effective supporting mobility, thereby preventing high yields from translating into positive economic values for Banyuasin Regency. Additionally, five sub-districts with LQ<1 signify that rubber plantations have not yet emerged as leading sectors in these areas.

Business cycles in a cocoa and gold economy: Commodity price shocks do not always matter

This paper seeks to characterize the response of Ghana’s business cycle to cocoa and gold commodity price shocks using a time-varying parameter structural vector autoregressive (TVP-SVAR) model. We then provide some plausible explanations underlying the estimated effect of these price shocks on Ghana’s business cycle. In the yearly model, a significant positive effect of a cocoa price shock on Ghana’s business cycle is observed using data from 1960 to 2018. However, no significant effect of a gold price shock on Ghana’s business cycle was found. In the quarterly model, we found no significant effect of both cocoa and gold price shocks on Ghana’s quarterly business cycle under Ghana’s inflation-targeting monetary policy regime. The study concludes that the expected strong influence of cocoa and gold commodity price shocks on Ghana’s yearly and quarterly business cycles is not consistently supported by empirical data for all periods and time frequencies. We then suggest plausible explanations for the unexpectedly weak estimated effects of the two commodity price shocks on Ghana’s business cycle, particularly after the mid-1980s, including the role of a foreign-dominated gold sector, the influence of cocoa forward contracts, and the impact of cocoa smuggling. These findings call into question the incorporation of cocoa and gold commodity sectors into a business cycle model for Ghana’s economy for all business cycle episodes and time frequencies, contrary to conventional wisdom. Gold and cocoa windfalls/shortfalls in the short run are almost non-existent, which has important implications for Ghanaian policymakers and model builders.

Investment Cooperation of the EAEU Countries and Latin America in Modern Conditions

The relevance of the study is related to the trend of the states of the "global" South towards a polycentric world, accompanied by an independent foreign economic course. The EAEU is interested in expanding cooperation with Latin American countries. The purpose is to conduct a comparative analysis of the macroeconomic indicators of the EAEU and LAC countries and FDI destinations based on statistical data. Objectives: to analyze the current state of macroeconomic indicators of the integration associations of the EAEU and LAC in order to identify identical development indicators; to characterize the country and sectoral directions of FDI of the EAEU countries in the countries of Latin America and the Caribbean in comparison with similar investments of the countries of the "collective" West and the United States. Methodology. Investment cooperation is analyzed within the framework of the theory of structural functionalism (Parsons) using macroeconomic indicators of foreign trade cooperation based on UNCTAD statistics on world investments, data from the central banks of Bolivia, Brazil, statistical agencies CEPAL and the Bank of Russia. Results. It has been proved that investment flows between the EAEU and LAC have developed unevenly, and the volume of investments has fluctuated significantly. This trend reflects the general stagnation of the EAEU's investment activity in Latin America outside the commodity sectors. The leading sector attracting investment is the software and IT services sector in LAC. Conclusions. There is a trend towards an increase in the volume of trade turnover between the regions of the EAEU and the LAC, but investment cooperation between the countries is slowed down due to the logistical inaccessibility of the region, the insufficient development of the port infrastructure of the LAC, the lack of interbank relations, and insufficient state support in the LAC.

Connectedness and risk spillover in China's commodity futures sectors

AbstractThis study employs minimum spanning tree and generalized forecast error variance decomposition methods to investigate the connectedness and risk spillovers across China's commodity sectors from January 2016 to December 2021. The results show that total connectedness within the commodity system is time varying. Chemical is the main risk driver, while other sectors occasionally dominate the system. These two methods achieve consistent results in identifying the systemically important sector and dynamic connectedness. In addition, we find that Chinese economic policy uncertainty and the investor sentiment index have significant impacts on total connectedness. Our findings have implications for preventing systemic risk for policymakers and managing commodity portfolio risk for investors.

Comparative advantage of Indonesian mushroom commodities in the green technology era

Mushroom is a commodity in the agricultural sector that has the potential to be developed in global trade competition. As part of the ASEAN regional cooperation institution, Indonesia can contribute to achieving excellence in mushroom commodities. Developing mushroom cultivation to support green technology innovation also helps achieve food security for future generations. This research aims to analyze and overview the comparative advantages of ASEAN with China related to mushroom commodities in 2018-2022. This research uses descriptive analysis methods and RCA-Revealed Comparative Advantage analysis in calculating the RCA of this mushroom, using HS codes 0709, 0711, and 0712. HS code 0709 represents mushroom commodities based on the sub “Fresh or chilled mushrooms of the genus “Agaricus” and Fresh or chilled edible mushrooms and truffles. The results show that China has a comparative advantage over ASEAN regarding mushroom commodities in 2018-2022. China outperforms in 3 mushroom commodity sectors in HS Codes 071159, 071151, and 071239. In comparison, ASEAN regional institutions have a low and weak level of comparative advantage in each mushroom commodity code. These results indicate that countries that are members of ASEAN pay less attention to mushroom commodities. Therefore, strategic efforts are needed to develop mushroom commodities supporting green technology innovation by prioritizing humidity control to achieve national food security goals.

Rethinking the balance-of-payments-constrained approach, in the light of the recent commodity boom

We develop a balance-of-payments-constrained growth (BPCG) model to explain the specific conditions of small commodity-dependent countries. Based on Thirlwall’s model and subsequent contributions, we elaborate a new model that assumes exogenous export prices, infinite price elasticity of export demand, and supply of commodities that react to prices with positive, but not infinite, elasticity. We contribute to explaining the central role of export prices and the relevance of price competitiveness in the growth dynamics. It is shown that a real devaluation and an improvement in terms of trade (TT) in a context of increasing international prices increase the equilibrium growth rate. However, export prices are more relevant than import prices in determining the growth of these countries, challenging the traditional interpretation of TT. Moreover, our model enriches the extensive literature which has corroborated that a development strategy based exclusively on increasing production capacity in commodity sectors is doomed to fail.

Co-movement of commodity futures and stock markets

Navigating through the complex interface of commodities and stock markets, this paper elucidates the pivotal role of commodities in sustaining China's expansive economic and infrastructural panorama. Amidst significant urbanization, industrial advancement, and burgeoning population, China's vast commodities sector plays a vital role in satisfying domestic consumption, facilitating export operations, and underpinning sustained growth. Exploring the intricate linkage between commodities and stock markets, the study reveals a positive correlation between commodity futures and stock market dynamics, enriching the discourse on their co-movements within an emerging economy framework like China. The research, while offering invaluable insights into the complexities of these relationships, also lays the groundwork for future studies, inviting exploration into the causal dynamics and global perspectives. The findings, though illuminative, underscore the necessity for holistic, judicious investment and policy decision-making, reminding stakeholders to meticulously consider broader financial landscapes and market peculiarities alongside analytical insights, thus balancing data-driven decisions with strategic foresight in the vast, interconnected world of financial markets.