Comparing The Relationship Between Crude Oil And Biodıesel On Selected Agricultural Products

Crude oil consumption increases year by year. Therefore, crude oil price changes affect energy costs. The use of biodiesel as an alternative has created competition among energy sources in terms of both preventing environmental pollution and ensuring economic sustainability. In this study, the impact of both crude oil and new types of biodiesel price shocks on agricultural commodity prices in the world is analysed. A review of academic studies shows that the widespread use of biodiesel can mitigate the impact of crude oil prices on the agricultural sector, so investments in the biofuel sector have the potential to reduce price fluctuations of agricultural products. Crops such as soybeans, corn and wheat are generally used for biodiesel production. Changes in agricultural prices affect food prices and energy costs. In this study, the impact of two alternative energy sources on agricultural products is analysed. Thus, it is aimed to determine sustainable energy policies and to explain the relationship between energy costs and agricultural products. The data used in this study are obtained from the monthly data set of crude oil, biodiesel, corn, soybean and wheat prices obtained from the FED database for the period 1990:01-2022:07. In the study, the NARDL model, which shows nonlinear and asymmetric effects, is used for two separate regressions. In both regression models used in the study, it was found that positive and negative shocks of oil and biodiesel prices do not have the same effect on agricultural goods. According to the results of the analysis, increases in both crude oil and biodiesel prices are generally found to have a positive relationship and a significant effect. In addition, a shock in biodiesel prices is found to stabilise in a shorter period compared to crude oil. In this context, it is estimated that the biofuel sector is likely to be more important in agricultural commodity prices than the crude oil sector. Focusing efforts on the development of the biofuel sector is expected to have a positive spillover effect on the agricultural sector and will have positive effects on welfare and living standards by ensuring the availability of agricultural products at affordable prices. JEL Codes : Q16, Q11, C22