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Agricultural commodity markets in the wake of the black sea grain initiative

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  • Goyal, Raghav
  • Steinbach, Sandro

Abstract

This paper studies the futures market response to the Russian invasion of Ukraine and the Black Sea Grain Initiative. Event study estimates indicate that futures prices for agricultural commodities were 16% above the counterfactual within the first nine weeks after the invasion. The dynamic treatment estimates also show that futures prices began to recede after the EU Solidarity Lanes were established in May 2022. The Black Sea Grain Initiative did little to change the perception of agricultural commodity traders regarding the futures market uncertainty caused by the Russia–Ukraine war. Our ex-ante estimates challenge the prevailing narrative that the Black Sea Grain Initiative was critical in lowering prices for agricultural commodities.

Suggested Citation

  • Goyal, Raghav & Steinbach, Sandro, 2023. "Agricultural commodity markets in the wake of the black sea grain initiative," Economics Letters, Elsevier, vol. 231(C).
    • Handle: RePEc:eee:ecolet:v:231:y:2023:i:c:s0165176523003221
    DOI: 10.1016/j.econlet.2023.111297
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Cited by:

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    2. Ichim Alexandru-Mihăiță, 2024. "An Empirical Analysis of the European Union's Economy and Politics in the Context of the War in Ukraine," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 18(1), pages 482-493.
    3. Sandro Steinbach & Yasin Yildirim, 2024. "Agricultural commodity market response to Russia's withdrawal from the grain deal," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(3), pages 1004-1016, September.
    4. Dutta, Anupam & Uddin, Gazi Salah & Sheng, Lin Wen & Park, Donghyun & Zhu, Xuening, 2024. "Volatility dynamics of agricultural futures markets under uncertainties," Energy Economics, Elsevier, vol. 136(C).
    5. Countryman, Amanda M. & Litvinov, Valentyn & Kolodiazhnyi, Ivan & Bogonos, Mariia & Nivievskyi, Oleg, 2023. "Global Economic Effects of War-Induced Agricultural Export Declines from Ukraine," 2023: The Future of (Ag-) Trade and Trade Governance in Times of Economic Sanctions and Declining Multilateralism, December 10-12, Clearwater Beach, FL 339542, International Agricultural Trade Research Consortium.

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    More about this item

    Keywords

    Russian invasion of Ukraine; Black Sea Grain Initiative; Agricultural commodities; Futures price; Historical volatility; Event studies; Counterfactual evaluation; Commodity heterogeneity;
    All these keywords.

    JEL classification:

    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing

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