Oil Price Effects on Land Use Competition – An Empirical Analysis
The increasing use of food commodities for biofuel production has substantial impact on prices and quantities of these and other food commodities. It is therefore likely that this trend also intensifies the competition for arable land. However, evidence for this hypothesis is generated by calibrated models while empirical evidence is rare. In this paper we analyze the effects of crude oil price and prices of input factors for biofuel production on prices, areas and quantities of selected food commodities empirically performing Granger causality and cointegration tests as well as calculating impulse response functions. On the world aggregated level we reveal that the crude petroleum price only Granger causes the price of maize and wheat but the area used for the production of maize, soybean oil, sugar and wheat. The effect on wheat indicates an indirect effect on land use. Moreover, the price index of fats and oils has a stronger effect on prices, areas and quantities of other food commodities. At the country level, we identify that for the U.S., the maize price is the key variable influencing area and quantity of cereals. Additionally, in Indonesia and Malaysia we find that the palm oil price has significant effects on the area and quantity of rice. Despite these positive effects of commodity prices on land use we find no evidence for direct land competition between oil crops and cereals.
|Date of creation:||May 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Hohenzollernstraße 1-3, 45128 Essen|
Web page: http://www.rwi-essen.de/
More information through EDIRC
|Order Information:||Web: http://www.rwi-essen.de/publikationen/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andrade de Sa, Saraly & Palmer, Charles & Engel, Stefanie, 2010.
"Ethanol Production, Food and Forests,"
Proceedings of the German Development Economics Conference, Hannover 2010
21, Verein für Socialpolitik, Research Committee Development Economics.
- Saraly Andrade de Sa & Charles Palmer & Stefanie Engel, 2010. "Ethanol production, food and forests," LSE Research Online Documents on Economics 27950, London School of Economics and Political Science, LSE Library.
- Saraly Andrade de Sa & Charles Palmer & Stefanie Engel, 2010. "Ethanol Production, Food and Forests," Environmental Economy and Policy Research Working Papers 48.2010, University of Cambridge, Department of Land Economics, revised 2010.
- 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).
- Rathmann, Régis & Szklo, Alexandre & Schaeffer, Roberto, 2010. "Land use competition for production of food and liquid biofuels: An analysis of the arguments in the current debate," Renewable Energy, Elsevier, vol. 35(1), pages 14-22.
- Harri, Ardian & Nalley, Lanier & Hudson, Darren, 2009.
"The Relationship between Oil, Exchange Rates, and Commodity Prices,"
Journal of Agricultural and Applied Economics,
Cambridge University Press, vol. 41(02), pages 501-510, August.
- Harri, Ardian & Nalley, Lawton Lanier & Hudson, Darren, 2009. "The Relationship between Oil, Exchange Rates, and Commodity Prices," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 41(02), August.
- Pindyck, Robert S & Rotemberg, Julio J, 1990.
"The Excess Co-movement of Commodity Prices,"
Royal Economic Society, vol. 100(403), pages 1173-89, December.
- Pindyck, Robert S. & Rotemberg, Julio., 1987. "The excess co-movement of commodity prices," Working papers 1969-87., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Robert S. Pindyck & Julio J. Rotemberg, 1988. "The Excess Co-Movement of Commodity Prices," NBER Working Papers 2671, National Bureau of Economic Research, Inc.
- Peters, Jörg & Thielmann, Sascha, 2008.
"Promoting biofuels: Implications for developing countries,"
Elsevier, vol. 36(4), pages 1538-1544, April.
- Peters, Jörg & Thielmann, Sascha, 2008. "Promoting Biofuels: Implications for Developing Countries," Ruhr Economic Papers 38, Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI), Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
- Muhammad, Andrew & Kebede, Ellene, 2009. "The Emergence of an Agro-Energy Sector: Is Agriculture Importing Instability from the Oil Sector?," Choices, Agricultural and Applied Economics Association, vol. 24(1).
- Murphy, Richard & Woods, Jeremy & Black, Mairi & McManus, Marcelle, 2011. "Global developments in the competition for land from biofuels," Food Policy, Elsevier, vol. 36(S1), pages S52-S61.
- Saghaian, Sayed H., 2010.
"The Impact of the Oil Sector on Commodity Prices: Correlation or Causation?,"
Journal of Agricultural and Applied Economics,
Southern Agricultural Economics Association, vol. 42(03), August.
- Saghaian, Sayed H., 2010. "The Impact of the Oil Sector on Commodity Prices: Correlation or Causation?," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 42(03), pages 477-485, August.
- Zhang, Qiang & Reed, Michael R., 2008. "Examining the Impact of the World Crude Oil Price on China's Agricultural Commodity Prices: The Case of Corn, Soybean, and Pork," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6797, Southern Agricultural Economics Association.
- repec:zbw:rwirep:0038 is not listed on IDEAS
- Murphy, Richard & Woods, Jeremy & Black, Mairi & McManus, Marcelle, 2011. "Global developments in the competition for land from biofuels," Food Policy, Elsevier, vol. 36(Supplemen), pages S52-S61, January.
- 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 TN 9881, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
When requesting a correction, please mention this item's handle: RePEc:rwi:repape:0340. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Weiler)
If references are entirely missing, you can add them using this form.