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Long‐run Relationships Between World Vegetable Oil Prices[Note 1. A preliminary draft of this article benefited greatly from ...]
Author(s) -
In Francis,
Inder Brett
Publication year - 1997
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/1467-8489.00024
Subject(s) - cointegration , economics , stock (firearms) , multivariate statistics , oil price , vegetable oil , stock market , econometrics , financial economics , buffer stock scheme , crude oil , short run , monetary economics , agricultural economics , macroeconomics , chemistry , food science , mathematics , geography , petroleum engineering , statistics , archaeology , engineering , context (archaeology)
In the international edible oil markets, there is believed to be high substitutability between vegetable oils and fats produced under different conditions. In light of this, we consider the question: what is the nature of the long‐run relationships between vegetable oil prices? Long‐run co‐movements among oil prices are analysed, based on a multivariate cointegration model. The empirical finding is that most co‐movements are consistent with the predictions of market theory. Prices of oils tend to be grouped according to their different end‐uses. Some policy implications of a buffer stock scheme are discussed.