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Sustainability 2018, 10(4), 1199;

Agricultural Commodities and Crude Oil Prices: An Empirical Investigation of Their Relationship

Department of Agricultural Development, Democritus University of Thrace, Xanthi 671 00, Greece
Department of Forestry and Management of the Environment and Natural Resources, Democritus University of Thrace, Xanthi 671 00, Greece
Author to whom correspondence should be addressed.
Received: 11 March 2018 / Revised: 10 April 2018 / Accepted: 11 April 2018 / Published: 16 April 2018
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Within the last few decades, the extended use of biodiesel and bioethanol has established interlinkages between energy markets and agricultural commodity markets. The present work examines the bivariate relationships of crude oil–corn and crude oil–soybean futures prices with the assistance of the ARDL cointegration approach. Our findings confirm that crude oil prices affect the prices of agricultural products used in the production of biodiesel, as well as of ethanol, validating the interaction of energy and agricultural commodity markets. The practical value of the present work is that the findings provide policy makers with insight into the interlinkages between agricultural and energy markets to promote biodiesel or bioethanol by affecting crude oil prices. The novelty of the present work stands on the use of futures prices that incorporate all available information and thus are more appropriate to identify supply and demand shocks and price spillovers than real prices. Finally, the period of study includes extremely low, as well as extremely high, crude oil prices and the results illustrate that biofuels cannot be substituted for crude oil and protect economies from energy volatility. View Full-Text
Keywords: soybean; corn; crude oil; energy markets; sustainable development soybean; corn; crude oil; energy markets; sustainable development

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Zafeiriou, E.; Arabatzis, G.; Karanikola, P.; Tampakis, S.; Tsiantikoudis, S. Agricultural Commodities and Crude Oil Prices: An Empirical Investigation of Their Relationship. Sustainability 2018, 10, 1199.

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