Changes In Commodity Prices Research Articles

Efficient multi-objective metaheuristic algorithm for sustainable harvest planning problem

The shift towards sustainable and regenerative agriculture is being propelled by global farmers due to increasing awareness of social inequalities and climate change. To make this transition a reality, farmers should consider various sustainability factors including all economic, environmental, and social factors, and tackle the complexity of the harvest planning. This study introduces a new multi-objective optimization approach that employs fuzzy logic and multiple objectives to facilitate sustainable harvest planning in the face of various sources of uncertainties such as changes in commodity prices, weather conditions, crop ripening patterns, and productivity fluctuations. The model seeks to optimize profit while minimizing greenhouse gas emissions and wastes generated by harvesting machines as the economic and environmental dimensions. To incorporate social sustainability, we define the farmer's working days on each block as a constraint set in our model. To address the complexity of this optimization model in large-scale networks, this paper proposes a revised version of the non-dominated sorting genetic algorithm (NSGA-II) using the genetic engineering concept, called the non-dominated sorting genetic engineering algorithm (NSGEA). This article showcases the outcomes of a case study that employed the blueberry industry in Canada. The findings indicate that the NSGEA algorithm, which was proposed in the study, is effective in addressing our multi-objective optimization model in comparison to other metaheuristic algorithms and the epsilon constraint method. This paper concludes by discussing theoretical contributions and managerial insights that emphasize the advantages of the proposed multi-objective harvest planning problem for achieving sustainable blueberry agriculture in Canada.

Exploring The Global Slack Hypothesis On Inflation Dynamics: A Study In ASEAN-5

Inflation is one of the economic problems that often occur in ASEAN-5 countries. External factors affecting inflation such as changes in energy prices and commodity prices (agriculture, metals, and minerals) can affect inflation in ASEAN-5 countries through the influence of global slack. Therefore, this study was conducted to examine the effect of global slack on domestic inflation dynamics in ASEAN-5 countries by considering the effect of energy price index and commodity price index (agriculture, metals, and minerals) on domestic inflation. The data analysis method used is the Panel of Vector Error Correction Model (VECM-Panel) by considering the effect of energy price index and commodity price index (agriculture, metals, and minerals) on domestic inflation in ASEAN-5. The results show that there is an influence of global slack on domestic inflation in ASEAN-5 countries, especially through the energy price index and commodity price index. Energy prices affect inflation in both the short and long run, whereas commodity prices only affect long-term inflation. The implication of the results of this study is the importance of the role of global commodity price stability policy in maintaining domestic price stability in ASEAN-5.

Commodity currency reactions and the Dutch disease: the role of capital controls.

The online version contains supplementary material available at 10.1007/s00181-023-02423-9.

Dynamic linkages between shipping and commodity markets: Evidence from a novel asymmetric time-frequency method

This study extends the existing literature in this area by examining the connectedness and shock spillover between commodity and shipping markets using a new novel time-varying frequency and quantile connectedness method developed by Chatziantoniou et al (2022) based on B&K (2018) and Ando et al (2018). Connectedness and shock transmission between the markets were analysed with daily data covering July 4, 2012 to July 20, 2022. A major value added of this study to the existing literature is the examination of the asymmetric effect of commodity price changes (or return) on the connectedness of the markets. Mean-frequency total connectedness analysis indicates that, the overall shipping market (BDI) is both the transmitter (to) and receiver of the highest shock from the entire market connectedness system. In the short-term, the agricultural markets dominate as both the transmitters and receivers of the major shocks to and from the entire market system, while in the medium-term, the shipping markets dominate as both the transmitters and receivers of the largest shocks to the entire market system. However, in the long-term, connectedness and shock propagation were very low. The time-varying quantile analysis reveals that, connectedness was very strong before, during and after COVID-19 at the bearish and bullish market conditions. Further, the time-varying frequency connectedness analysis shows that, although total connectedness is relatively high overtime, it was propelled by short-term dynamics. Metal markets are connected among themselves, and with both agricultural and shipping markets. Agricultural markets are connected among themselves, and with shipping markets, which are only connected among themselves. There is evidence of the asymmetric effect of commodity return dynamics on the connectedness of the markets. Some important policy recommendations were drawn from the findings.

The Causal Relation between Energy Consumption, Carbon Dioxide Emissions, and Macroeconomic Variables in Somalia

This study investigated the relationship between energy consumption, carbon dioxide emissions, and macroeconomic variables in Somalia with data spanning from 1990 to 2019 using ARDL model. The study found a negative long-run relationship between carbon dioxide emissions and energy consumption in Somalia, suggesting that improving access to clean energy can reduce the gradual rise of carbon dioxide emissions. The study also found that rising industrial value-added had a significant positive impact on energy consumption. Furthermore, findings from Cholesky's variance decomposition showed that 13.13% of future fluctuations in energy consumption are due to shocks in carbon dioxide emission, 33.63% of future fluctuations in carbon dioxide emissions are due to shocks in energy consumption, 40.63% of future fluctuations in industrialization are due to shocks in energy consumption and 41.23% of future fluctuations in population are due to shocks in energy consumption. There was evidence of a bidirectional causality between: energy consumption and population. The study suggests adding renewable energy technologies to the energy portfolio. This would help reduce reliance on unstable energy sources and reduce the chance that changes in commodity prices will interrupt the energy supply, which eventually would help reduce the effects of climate change.

The energy rebound effect in households: Evidence from urban and rural areas in Beijing

With Beijing facing greater pressure for energy conservation, improving energy efficiency becomes more necessary. However, the energy rebound effect may weaken this energy-saving effect. Using the LA-AIDS (Linear Approximation of the Almost Ideal Demand System) model and simulation analysis, this paper evaluates the energy rebound effects of different commodity groups in Beijing’s urban and rural households during 2000–2019. Then, the Slutsky decomposition equation is introduced to decompose the energy rebound caused by the substitution and income effects. Results suggest that: (1) The energy consumption of urban and rural residents shows a partial rebound in most years, and the energy rebound effect of rural residents exceeded that of urban residents after 2010. (2) The income effect from commodity price changes is the main source of the energy rebound effect both in urban and rural households. (3) The commodity groups Residence, Household facilities & Services, Transportation & Communication and Health care & Medical services have the same influencing direction on the energy rebound effect in urban and rural residents, while the commodity groups Food, Tobacco & Alcohol, Clothing and Culture, Education & Entertainment have different influencing direction. Finally, suggestions are provided for alleviating the energy rebound effect of households in Beijing.

Food commodity price changes and consumer welfare in Bangladesh: Valuable lessons for today

AbstractThe recent rise in global food prices threatens many countries worldwide, especially the vulnerable populations. Viable coping strategies can only be designed based on the important policy lessons learned from the experiences of these countries in confronting the similar shocks of 2007–2011. However, the disproportionate effects of these events and the impacts of policy responses remain largely unexplored. We examine the impact of a food price surge and the effectiveness of various mitigating policies in Bangladesh, one of the most populous, densely populated countries in the world that is plagued by poverty. Specifically, we combine individual‐level expenditure survey data with recent advances in consumer theory to examine the welfare consequences across income groups and geographic areas of the country over 2000–2016. Our empirical findings lend support to the hypothesis that the brunt of the price surge was borne by relatively less affluent and rural households, and government poverty alleviation programmes were largely ineffective.

Gerakan Pangan Murah (GPM) Terhadap Masyarakat Terdampak Bencana (Dinas Pangan Provinsi Sulawesi Tengah )

Natural disasters are events or series of events that threaten and disrupt people's lives which are caused by natural or non-natural factors, causing casualties, environmental damage, and much more. (Isa, 2016). The occurrence of natural disasters on the regional economy is of course very influential, especially in changes in food commodity prices. Food commodities are a basic need that is important for maintaining human survival. Food commodities have a very important role in economic, social and political aspects. However, in terms of the economy, food commodity prices in Indonesia often experience price changes, especially for disaster-affected areas. Price changes in food commodities are the biggest contributor to the inflation rate in Indonesia. one of the efforts made to control inflation is to carry out a work program, namely the "Cheap Market Movement" which is the government's effort to control the inflation rate. The government agency that has the task of carrying out government affairs in the food sector is the Food Service of the Province of Central Sulawesi. In carrying out the tasks as intended. In this activity, the author carried out the target of activities in the Permanent Residence (HUNTAP) Layana, Mantikulore District.

The Ethanol Market and Its Relation to the Price of Agricultural Commodities

In this article, we seek to present the synthesis of the global ethanol market in the United States (US) and Brazil by using caloric equivalence to empirically characterize the elasticity of supply and demand. We also seek to evaluate the relationship between world ethanol production and prices of agricultural commodities (wheat, rice, corn, soybeans and sugar) from 1981 to 2016 using climate-induced yield shocks as instrumental variables. The main results for the world market indicate that the production and demand for ethanol respond elastically to changes in commodity prices. The world ethanol production has no significant relationship with food prices. However, evaluation of the ethanol market and its interaction with the agricultural commodities market confirms the hypothesis that Brazilian ethanol is weakly related to the price of food.

ANALYSIS OF THE GLOBAL FOOD CRISIS IN INTERNATIONAL MARKETS BY THE ASYMMETRIC TVP-VAR METHOD

It is the expenditure on consumption that constitutes the basic share of the expenditures of the households that supply labor as a factor of production in an economy. These expenditures have an indirect effect on the input costs of the companies that demand labor as a production factor. The change in food prices determines both the relative price structure of the economy and the inflationary trend in the economy for the future, depending on the changes in labor and goods markets. For this reason, households that make the consumption decisions of companies as a producer decision unit in the economy are highly sensitive to changes in food commodity prices. A continuous and permanent change in food commodity prices has a direct impact on consumption expenditures and investment decisions. This effect causes supply shocks that may arise as a result of food and commodity prices to turn into demand shocks at the same time. From this point of view, this study investigates the distribution of volatility in global commodity prices, food commodity prices, Baltic dry indices, and crude oil prices, which are the indicators of price trends of basic inputs in international markets. Thus, the mechanism of spillover of a possible supply shock is revealed at the international level under the restrictions of the asymmetric TVP-VAR approach.

Effects of Diesel Price on Changes in Agricultural Commodity Prices in Bulgaria

The aim of this article is to supply the first empirical research inspecting how changes in diesel prices influence the prices of four agricultural commodities in Bulgaria. For this purpose, using a VECM and monthly agricultural commodity prices between January 2011 and July 2022, we estimated short-run and long-run changes in producer and retail prices of cow’s milk, chicken eggs, greenhouse tomatoes and cucumbers due to the change in average monthly diesel prices. The Granger causality test indicates that diesel prices cannot be used to forecast the behavior of producer and retail prices in the four markets considered. Diesel prices can be used to forecast the behavior of producer prices in only the cow’s milk market, and the diesel price predicts retail prices in the chicken egg and greenhouse cucumber markets. The results of the response of the researched prices of agricultural commodities to diesel price shocks indicate a positive response of both upstream and downstream prices of cow’s milk and chicken egg markets and upstream prices of the greenhouse tomato market despite the initial negative shock.

Analyzing Commodity Prices in the Context of COVID-19, High Inflation, and the Ukrainian War: An Interview with James Hamilton

The following interview with Prof. James Hamilton was conducted in September 2022 by Dr. Fredj Jawadi with the assistance of Professor Adonis Yatchew in association with the 6th International Workshop on Financial Markets and Nonlinear Dynamics (FMND) held in Paris, France. The interview includes 20 questions related to commodity price dynamics. The aim of the discussion was, first, to help readers gain a better understanding of the factors driving commodity price volatility during the COVID-19 pandemic. Second, we analyzed commodity reactions to the ongoing Ukrainian war. Third, we examined the impact of changes in commodity prices on the economy as a whole and on inflation in particular. Finally, we discussed projections related to the dynamics of commodity prices in the future and the impact on the energy transition process. We hope that this interview will give readers clearer insights into the causes and consequences of commodity price changes and their evolution over time.

Farzana Naqvi. Energy, Economy and Equity Interactions in a CGE Model for Pakistan. Aldershot: Ashgate Publishing Company, 1997. Hardbound. Price not given. xxii+290 pages.

Modernisation of the agricultural, industrial and household sectors causes the demand for energy to increase more rapidly than its supply. In countries that aim to modernise quickly a heavy investment is required to redress this imbalance. That is why in countries such as Pakistan, the energy has remained on the top of the agenda of loan negotiation with international donor agencies. Energy serves as both a final consumption good and as an essential intermediate input in the production of goods. Thus any change in the price of energy at both these levels affects consumption as well as production and that, in turn, can cause changes in the prices of all other commodities. A change in the prices of exportables affects their demand in foreign markets and any change in the prices of import-competing and nontraded goods affects their demand at home. The net effects of all these changes can be measured in terms of the effects on real GDP, balance of trade, and government revenue. And, because any change in commodity prices exerts a negative impact on real consumption of households; the formulation of a comprehensive energy policy requires a framework that can take the immense complexity of the linkages of all the sectors of the economy into consideration. In the book under review, Dr Farzana Naqvi, argues that the issues of energy pricing can not be examined in isolation and presents a general equilibrium framework to address the complex issues related to energy, economy and equity.

Hydro-agro-economic optimization for irrigated farming in an arid region: The Hetao Irrigation District, Inner Mongolia

Water shortage and soil salinization are the key limiting factors in agricultural production of arid and semi-arid regions. Located in western Inner Mongolia of China, the Hetao Irrigation District (HID) is one of the top three largest irrigation districts in China. Irrigation water overuse and high level of soil salinity have curbed the agricultural productivity, adversely affected farmers’ revenues, and threatened long-term sustainability of irrigated farming in the HID. Nevertheless, opportunities still exist to improve the situation. Irrigation water allocation, salt accumulation and leaching, crop productivity and farming decisions are intrinsically connected and thus require taking a holistic approach to investigate into the interactions among all those factors and devise appropriate technological, management and policy interventions. Towards this goal, we develop an integrated hydro-agro-economic optimization model to reconcile agricultural net revenue, irrigation practices, and environmental sustainability in the HID. Positive Mathematical Programming is used for model calibration to ensure the model can replicate the base year observations of crop acreage, making the model suitable for evaluating alternative scenarios. Scenario analyses are conducted to analyze the effects of water supply reduction, reducing winter irrigation, water-saving irrigation, and crop commodity price change on optimal agricultural water management practices. Results show that water supply reduction without complementary measures increases land fallow, exacerbates soil salinization, and reduces net benefits. Winter irrigation can conserve soil moisture and increase the net salt leaching in the root zone, and a reduction in winter irrigation will incur a benefit loss to the HID. Water-saving irrigation can stabilize planting areas under water shortage but exacerbate soil salinization. Price increase of a cash crop, if it has a large area share, tends to “crowd out” grain crops growing in the same season. These results provide a holistic perspective and useful insights for water management and policy in the HID.

CEO risk preferences, hedging intensity, and firm value

We examine the effect of hedging with different derivative instruments on the market value of firms run by CEOs with different risk preferences – based on a noble dataset over five years. We focus on the interest rate, commodity, and foreign exchange derivatives and find striking similarities in the hedging intensities of risk-seeking and risk-averse CEOs. Our findings show that when the average firm experiences an extreme (three-standard-deviation) change in interest rates, commodity prices, or foreign exchange rates, its derivatives portfolio creates only modest gains, regardless of CEO risk preferences. These findings are consistent with the view that hedging is just an insurance policy, not a value-increasing strategy. Our results suggest that CEOs, irrespective of their different risk preferences, are unwilling to forgo wealth-creating projects to hedge corporate risks.

Forecasting stock prices with commodity prices: New evidence from Feasible Quasi Generalized Least Squares (FQGLS) with non-linearities

The complexities in modern stock markets make it imperative to unravel the possible predictors of their future values. This paper thus provides insights into the predictability of stock prices of the BRICS countries with large dependence on commodities either for foreign exchange earnings or industrial while accounting for the role of asymmetries. Essentially, empirical evidence abound for the high volatility in world commodity markets, thus making us to determine if positive and negative changes in commodity prices predict stock prices differently. In addition, unlike the traditional forecast models, our choice of forecast models additionally addresses certain statistical features, including conditional heteroskedasticity, serial dependence, persistence and endogeneity, inherent in the predictors, which have the potential of causing estimation bias. In all, we find evidence in favour of the ability of commodity prices to predict stock prices of Brazil, Russia and South Africa. Also, both the in-sample and out-of-sample forecast performances of the predicted models support asymmetries in a number of commodity prices in each of these three countries. Our results are robust to different data samples and forecast horizons.

Market update: Sixty years of change in Papua New Guineaʼs fresh food marketplaces

AbstractOpen‐air marketplaces are vital to food security, livelihoods, and the national economy in Papua New Guinea (PNG). Over the past 60 years, rapid growth of urban populations, changes in global commodity prices, and the decline in value of the PNG currency have stimulated demand for domestic fresh food. Selling fresh food in marketplaces has also become an attractive way to earn money for rural producers, whose returns on labour on their export crops have declined, and for urban residents struggling to make a living. This in turn has led to significant changes in PNGʼs marketplaces: spatial and temporal changes, changes in what is bought and sold, changes in who is selling, and changes in how food is transacted. In this paper, we bring together research on PNGʼs marketplaces from between 1961 and 2022 to document these changes and their causes, alongside important continuities, and to examine the implications and substantial gaps in our knowledge.

The COVID-19 effects on agricultural commodity markets

ABSTRACT This study examines the effect of the COVID-19 pandemic on major agricultural commodity prices (cattle, cocoa, coffee, corn, cotton, hog, rice, soya oil, soybeans, soybean meal, sugar and wheat) using daily data from 1 January 2016 to 25 February 2022. We measured COVID-19 effect using a news-based sentiment index. A robust nonparametric Granger causality-in-quantiles test is used to test the effect of the COVID-19 sentiment on agricultural commodity prices and price volatility. We find significant Granger causality from the news-based COVID-19 sentiment to mean of the agricultural commodity prices in the lower and upper ranges of the quantiles. Moreover, findings show that the COVID-19 sentiment is also causal for variance of agricultural commodity prices, but only above the quantile ranges above the first quarter. Thus, COVID-19 is causal for large volatility changes in agricultural commodity prices. Accordingly, the extremely negative sentiment associated with COVID-19 has not only caused a price crash in agricultural markets, but also significantly increased market risk. Policymakers should be wary of the risks and vulnerabilities of agricultural commodities to extreme events, as well as the ramifications for producers and consumers throughout the economy.

Commodity price volatility and stock market returns in an emerging economy

AbstractThe paper examined commodity price volatility and stock returns on the Ghana Stock Exchange (GSE). Utilising Threshold Generalised Autoregressive Conditional Heteroskedasticity (TGARCH) estimation technique, the study also evaluated the likely leverage effect on the stock market and further interrogated if autocorrelation existed in the daily stock returns series, for how many days and on what day does it disappear by specifying an autoregressive model as a mean equation. The study concludes that changes in commodity prices and their volatilities on the international market exert a significant level of diverse impact on daily stock returns and return volatility on the GSE. For instance, whilst coffee price changes result in reduction in daily stock returns, changes in crude and gold prices result in an increment in returns on the GSE. The study also confirms the existence of autocorrelation in the daily stock returns for up to seven days, fading out on the eighth day as well as the existence of the leverage effect on the GSE. This result should influence investment decisions in respect to trading on the GSE. Observance of changes in price of these key commodities could enhance predictions and lead to the formulation of strategies to maximise revenues on the GSE

Energy commodities: A study on model selection for estimating Value-at-Risk

Changes in commodity prices can be transmitted directly to the real economy through changes in the marginal cost of production. Therefore, it is extremely important to create some mechanism to protect against these movements in the commodities futures market. Exposure in this market comes along with tail risk, which must be measured and controlled using a risk measure. To help economic agents, this research provides a common statistical specification that can be used to reliably predict the Value‐at‐Risk of four important energy commodities. For this, the predictions of a range of 48 competing models, composed of four heteroskedastic specifications, six conditional distributions, and a Markov chain with up to two regimes, were compared using various statistical tests, and the model with the best average results was preferred.