TITLE:
The Review on the Link between Food and Oil Markets in the View of Price Dynamics
AUTHORS:
Ding Chen, Umar Muhammad Gummi, Abdulhamid Sillah Umar
KEYWORDS:
Oil Price, Food Price, Price Dynamics, Transmission Mechanisms, Oil Exporting Economies
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.9 No.9,
September
19,
2019
ABSTRACT:
The long established link between food and oil prices in the global market is
still uncertain in cross-country, regional and domestic analyses. In this paper,
we review theoretical and empirical submissions on the nexus between food
and oil market. Qualitative content analysis was used to critically analyze concepts
and theories based on the past empirical evidences. The analysis shows
that there is hardly a consistent and generalized submission on the direction
of the relationship between oil price and agricultural commodity prices, as
against the popular notion of co-movement between food and oil prices among
researchers. However, studies on cross country analysis are scarce and among
them, very few are related to oil exporting countries, hence the need to revisit
the unending debate on the relationship between the two important markets
based on economic structure (oil exporting/importing economy), capacity of
an economy (high/low income economy) and the causes and nature of crisis
in the markets.