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Long‐run Relationships Between World Vegetable Oil Prices

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  • In, Francis
  • Inder, Brett

Abstract

In the international edible oil markets, there is believed to be high substitutability between vegetable oils and fats produced under different conditions. In light of this, we consider the question: what is the nature of the long‐run relationships between vegetable oil prices? Long‐run co‐movements among oil prices are analysed, based on a multivariate cointegration model. The empirical finding is that most co‐movements are consistent with the predictions of market theory. Prices of oils tend to be grouped according to their different end‐uses. Some policy implications of a buffer stock scheme are discussed.

Suggested Citation

  • In, Francis & Inder, Brett, 1997. "Long‐run Relationships Between World Vegetable Oil Prices," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 41(4), pages 1-16.
    • Handle: RePEc:ags:aareaj:118058
    DOI: 10.22004/ag.econ.118058
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    References listed on IDEAS

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    Cited by:

    1. Abubakar, Fahrurrazi & Masih, Mansur, 2018. "Palm oil export : is it price led or exchange rate led? evidence from Malaysia," MPRA Paper 111229, University Library of Munich, Germany.
    2. Yu, Tun-Hsiang (Edward) & Bessler, David A. & Fuller, Stephen W., 2006. "Cointegration and Causality Analysis of World Vegetable Oil and Crude Oil Prices," 2006 Annual meeting, July 23-26, Long Beach, CA 21439, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Peri, Massimo & Baldi, Lucia, 2010. "Vegetable oil market and biofuel policy: An asymmetric cointegration approach," Energy Economics, Elsevier, vol. 32(3), pages 687-693, May.
    4. David Ubilava & Matt Holt, 2013. "El Niño southern oscillation and its effects on world vegetable oil prices: assessing asymmetries using smooth transition models," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(2), pages 273-297, April.
    5. Zhou, Liyun & Huang, Jialiang, 2020. "Contagion of future-level sentiment in Chinese Agricultural Futures Markets," Pacific-Basin Finance Journal, Elsevier, vol. 61(C).
    6. Bamiére, Laure & Martinet, Vincent & Gouel, Christophe & Le Cadre, Elodie, 2011. "Stochastic Viability of Second Generation Biofuel Chains: Micro-economic Spatial Modeling in France," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114238, European Association of Agricultural Economists.
    7. David Ubilava & Matt Holt, 2013. "El Niño southern oscillation and its effects on world vegetable oil prices: assessing asymmetries using smooth transition models," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(2), pages 273-297, April.
    8. Campiche, Jody L. & Bryant, Henry L. & Richardson, James W. & Outlaw, Joe L., 2007. "Examining the Evolving Correspondence Between Petroleum Prices and Agricultural Commodity Prices," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9881, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Mesbah Motamed & Kenneth A. Foster & Wallace E. Tyner, 2008. "Applying cointegration and error correction to measure trade linkages: maize prices in the United States and Mexico," Agricultural Economics, International Association of Agricultural Economists, vol. 39(1), pages 29-39, July.
    10. Peri, Massimo & Baldi, Lucia, 2008. "Biodiesel and vegetable oil market in European Union: some evidences from threshold cointegration analysis," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43971, European Association of Agricultural Economists.
    11. Pluske, Johanna M. & Lindner, Robert K., 2001. "Canola – Where to for WA Agriculture?," 2001 Conference (45th), January 23-25, 2001, Adelaide, Australia 125865, Australian Agricultural and Resource Economics Society.

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