Relationship between oil and food Prices in developing oil-exporting countries (2001-2013)
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Date
2016
Authors
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Journal ISSN
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Publisher
Economics,Obafemi Awolowo University
Abstract
The study analysed the trend of oil and food prices in developing oil-exporting countries. It also examined the short-run and long-run effects of oil price on food prices in these countries; and investigated the direction of causality between oil price and food prices in the countries. These were with a view to providing information on the relationship between oil and food prices in developing oil-exporting countries during the study period.
Secondary data covering the period between 2001 and 2013 were employed in the analysis. Annual data on food prices were sourced from the Food and Agricultural Organisation (FAO) Statistical Databases. Data on crude oil price were sourced from the US Energy Information Administration (EIA); while data on inflation rate, urban population and trade openness were sourced from World Development Indicator (WDI), 2014. Graphs, Panel Autoregressive Distributed Lag (ARDL) bound test and Granger causality test were used for the analysis of data.
The results indicated that oil price fluctuated throughout the study period, while food prices exhibited an upward trend throughout. The results also showed that in the long-run, oil price had a significant positive effect on food prices (t=12.59, p<0.05); while in the short-run, oil price had a positive, but insignificant relationship with food prices (t=0.54, p>0.05). Furthermore, the results revealed the existence of a unidirectional causal relationship between oil and food prices, with causality flowing from oil price to food prices (F=6.86, p<0.05).
The study concluded that oil price had a positive long-run effect on food prices in developing oil-exporting countries during the period of study.
Description
xii,99p
Keywords
Oil-exploring, Oil price, Food prices, Oil
Citation
Hassan,A.S (2016). Relationship between oil and food Prices in developing oil-exporting countries (2001-2013).Obafemi Awolowo University