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The impact of ethanol production on food prices: The role of interplay between the U.S. and Brazil

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  • Monteiro, Nathalia
  • Altman, Ira
  • Lahiri, Sajal

Abstract

Food prices have increased rapidly in recent years, and so has ethanol production. Some studies have claimed that there is a connection between the two. The main purpose of this paper is to add to this literature by examining the influence that the interplay between Brazil and the U.S. in ethanol production has on food prices. Specifically, and controlling for other variables, which have been shown to affect food prices, we investigate whether sugarcane ethanol and corn ethanol production have similar impacts on food prices, and whether ethanol productivity affects food prices. We find a positive significant effect of Brazilian market share in world ethanol market on relative food prices. We also find that an increase of Brazilian cane ethanol area has a negative effect on relative food prices.

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  • Monteiro, Nathalia & Altman, Ira & Lahiri, Sajal, 2012. "The impact of ethanol production on food prices: The role of interplay between the U.S. and Brazil," Energy Policy, Elsevier, vol. 41(C), pages 193-199.
    • Handle: RePEc:eee:enepol:v:41:y:2012:i:c:p:193-199
    DOI: 10.1016/j.enpol.2011.10.035
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    Cited by:

    1. Silva, E. & Lima, R., 2018. "Examining the relationship between biofuel and food crops markets in Brazil," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275883, International Association of Agricultural Economists.
    2. Carpio, Lucio Guido Tapia, 2019. "The effects of oil price volatility on ethanol, gasoline, and sugar price forecasts," Energy, Elsevier, vol. 181(C), pages 1012-1022.
    3. Maya Malinda & Jo-Hui Chen, 2022. "The forecasting of consumer exchange-traded funds (ETFs) via grey relational analysis (GRA) and artificial neural network (ANN)," Empirical Economics, Springer, vol. 62(2), pages 779-823, February.
    4. Umanath Malaiarasan & R. Paramasivam & K. Thomas Felix & S. J. Balaji, 2020. "Simultaneous equation model for Indian sugar sector," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 22(1), pages 113-141, June.
    5. Zhang, Dengjun & Asche, Frank & Oglend, Atle, 2014. "Ethanol and trade: An analysis of price transmission in the US market," Energy Economics, Elsevier, vol. 42(C), pages 1-8.
    6. Kocak, Emrah & Bilgili, Faik & Bulut, Umit & Kuskaya, Sevda, 2022. "Is ethanol production responsible for the increase in corn prices?," Renewable Energy, Elsevier, vol. 199(C), pages 689-696.
    7. Kafle, Kashi R. & Pullabhotla, Hemant K, 2014. "Food for the Stomach or Fuel for the Tank: What do Prices Tell Us?," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170273, Agricultural and Applied Economics Association.
    8. Bilgili, Faik & Kocak, Emrah & Kuskaya, Sevda & Bulut, Umit, 2022. "Co-movements and causalities between ethanol production and corn prices in the USA: New evidence from wavelet transform analysis," Energy, Elsevier, vol. 259(C).
    9. Ma, Chih-Ming & Chen, Ming-Hue & Hong, Gui-Bing, 2012. "Energy conservation status in Taiwanese food industry," Energy Policy, Elsevier, vol. 50(C), pages 458-463.
    10. Anelise Rahmeier Seyffarth, 2016. "The Impact of Rising Ethanol Production on the Brazilian Market for Basic Food Commodities: An Econometric Assessment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(3), pages 511-536, July.
    11. Dority, Bree L. & Tenkorang, Frank, 2016. "Ethanol Production and Food Price: Simultaneous Estimation of Food Demand and Supply," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 17(1), January.
    12. Rafael Henrique Mainardes Ferreira & Claudia Tania Picinin, 2018. "Bibliometric analysis for characterization of oil production in Brazilian territory," Scientometrics, Springer;Akadémiai Kiadó, vol. 116(3), pages 1945-1974, September.

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    Ethanol production; Food prices;

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