THE IMPACT OF PETROLEUM PRICES ON VEGETABLE OILS PRICES: EVIDENCE FROM COINTEGRATION TESTS

Amna Awad Abdel Hameed and Fatimah Mohamed Arshad

No 46251, Miscellaneous Papers from Agecon Search

Abstract: This paper investigate the long-term relationship between the petroleum and vegetable oils prices represented by palm, soybean, sunflower and rapeseed oils prices. To that end, the bivariate cointegration approach using Engle-Granger two-stage estimation procedure is applied. The study utilises monthly data over the period of January 1983 through March 2008. The results provide a strong evidence of long-run equilibrium relation between the two products prices. The estimates of the error correction models reveal a unidirectional long-run causality flowing from petroleum to each of the vegetable oils prices under study.

Keywords: Vegetable oils prices; petroleum prices; cointegration; causality tests; Agribusiness; Demand and Price Analysis; Marketing; Q11 Agricultural Prices (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-mkt
Date: 2008-12-15
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