Agricultural Grain Markets in the COVID-19 Crisis, Insights from a GVAR Model

Round 1

Reviewer 1 Report

See attached.

Comments for author File: Comments.pdf

Author Response

Please see the attachment.

Author Response File: Author Response.pdf

Reviewer 2 Report

The authors present a very interesting study for agricultural grain markets in the COVID-19 pandemic. Wheat, barley and maize are essential products to global food security. This is one of the first reports in this respect.

Author Response

We thank the reviewer for the good comments.

Reviewer 3 Report

About the submission with the title "Agricultural Grain Markets in the COVID-19 Crisis, Insights From a GVAR Model" I have the following comments:

 

The abstract should be rewritten highlighting motivations, gaps in the literature that justify the study, objectives, methodologies and main insights.

 

The literature review must be significantly improved, citing literature related with the objectives of the paper. This may support to identify other methodologies more adjusted with the intended with this manuscript.

 

In figure 1 and table 1 is difficult to understand what countries and years (table 1) the statistical information is associated.

 

After section 2 the paper change for the section 4!!

 

I was unable to understand why the authors selected the Global VAR model and not any other methodology. Why this approach is so important for this study? Is this methodology the must adjusted?

 

In table 2 maybe it could be interesting to present a legend for the countries considered. Why these countries?

 

In table 4 the authors used panel data? time-series? cross-section? It is also a little hard to understand what model was used to obtain the results presented in table 4. The models considered and the respective coefficients must be presented. In addition, should be shown the tests for multicollinearity, heteroscedasticity, autocorrelation, endogeneity, normality, ...

 

Figures presented in section 4 (wrongly numbered) need to be properly explained, namely its pertinence for the paper and how were obtained.

 

A discussion section is needed and the conclusions section is to present the main insights, policy recommendation, practical implications and suggestions for future research.

Author Response

Please see the attachment

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

Comments for author File: Comments.pdf

Author Response

Please see the attachment. Thanks

Author Response File: Author Response.pdf

Reviewer 3 Report

The authors only answered some parts of my first report such as explained following:

 

My comment: "The abstract should be rewritten highlighting motivations, gaps in the literature that justify the study, objectives, methodologies and main insights."

Response: "We were surprised by this comment. The objective of the paper is stated in the first sentence of abstract. We started from the literature and wrote “After reviewing the nascent literature on the impact of COVID-19 on agricultural markets”. For the methodologies we clearly stated the use of GVAR models. We believe to have also included the main insights : “ The results of the empirical analysis indicate that the fall in the oil price may have contributed to the stability of the world grain market in early 2020, despite fears of supply chain disruption. We also note that export restrictions could significantly increase global prices, and that such restrictions could affect more than the targeted commodity, through significant cross-commodity price linkages”."

After this I still found difficulties to understand the real main motivations, gaps, objectives, methodologies, ..... Please, clearly explain the main motivations, gaps, objectives, methodologies, novelties and main insights for the science and stakaholders.

 

My comment: "The literature review must be significantly improved, citing literature related with the objectives of the paper. This may support to identify other methodologies more adjusted with the intended with this manuscript."

 

Response: ""Thanks for this comments. We have added a paragraph which describes the advantages in using a GVAR models (please see the introduction last paragraph). The literature on GVAR has been updated."

 

A paragraph is not enough. On the other hand, the question here is not only about the GVAR, but about the all dimensions addressed in the paper. Please survey properly the literature about the topics considered.

 

My comment: "I was unable to understand why the authors selected the Global VAR model and not any other methodology. Why this approach is so important for this study? Is this methodology the must adjusted?"

 

Response: "Please see the introduction, last paragraph.".

 

The question here is not to present a paragraph with personal opinions, but survey the literature and support the options made with references that show the robustness of the decisions taken. Please present references that support scientifically your decisions.

 

My comment: "In table 2 maybe it could be interesting to present a legend for the countries considered. Why these countries?"

 

Response: "Thanks for these important remarks. Please see end of page 6 which and why we analyzed the export commodity prices for these countries".

 

Again, this is not about personal opinions, because this a scientific document where the several decisions must be supported with science (other papers already published). Please present references that support scientifically your decisions.

 

My comment: "In table 4 the authors used panel data? time-series? cross-section? It is also a little hard to understand what model was used to obtain the results presented in table 4. The models considered and the respective coefficients must be presented. In addition, should be shown the tests for multicollinearity, heteroscedasticity, autocorrelation, endogeneity, normality, ..."

 

Response: "As described in the paper, the model allows for the analysis for N countries, T periods and 3 commodities. The data are then panel time series data. This has been also clearly stated in equation 1. The GVAR model requires the estimation of (p+q)xN parameters for each commodity and given the amount of statistics, these data are generally not reported, while the attention is devoted to the analysis of the impulse responses. However, we reported the contemporary coefficient which gives the shortterm impact of a specific shock in the system. Testing endogeneity (actually, weak exogeneity) of foreign variables is a standard step in GVAR modelling. We performed that step (as well as other tests such as autocorrelation; AIC, R Squares, unit root tests, etc) However, we believe that this rather short manuscript and its angle (commentary on global wheat market and COVID-19) is better served by a lighter presentation of usual tests and a straightforward presentation of the model itself and the key results. Nevertheless, we welcome the reviewer’s examination of all our test results in the process of validating the quality of the manuscript. Here below some of our test results to re-assure the reviewer we carried out the appropriate investigation of our data. Here below the descriptive statistics developed for all our variables, and the Jarque-Bera test for normality (clipped to Wheat and Maize price variables, for the sake of space, but carried out for all variables).".

 

All my concerns presented in my comment should be discussed properly in the paper based on the values of the respective tests that must be presented also in the manuscript.

 

My comment: "Figures presented in section 4 (wrongly numbered) need to be properly explained, namely its pertinence for the paper and how were obtained."

 

Response: "The figures were obtained by estimating the GVAR model presented in section 3.1 and computing GIRFs. The origin and relevance of the data presented in figure 1 and 2 is outlined on page 8. The manuscript now mentions the following: “To study the COVID-19 2020 market context and the reaction of key variables across the model, we rely on Generalised Impulse Response Functions (GIRFs). These are obtained by examining the response of the model across several periods after a given shock to one variable of the system (see Pesaran and Shin (1998) for more on GIRFs adapted to VAR models)."

 

The explanations presented are far from the requested by my comment.

 

My comment: "A discussion section is needed and the conclusions section is to present the main insights, policy recommendation, practical implications and suggestions for future research."

 

Response: "Our results are discussed in section “3.2 Results discussion”. The conclusion section summarises briefly the main insights and the policy recommendations. We believe no practical implication can be inferred from this model. It rather produces supporting evidence for policy makers who have to figure out practical implications."

 

A discussion section is needed not only to discuss the results, but the dimensions addressed in ther paper. On the other hand, the conclusions section needs to be improved with suggestions presented in the comment.

Author Response

We have explained our position to the Editor.

Thanks

Author Response File: Author Response.pdf