How Do Energy Resources Affect Agricultural Market? Insights from Quantile-on-Quantile Approach

Abstract

Based on the important role that energy and agricultural commodities play in sustainable development, this article investigates their price movements to understand their impact on each other. By utilizing an innovative quantile-on-quantile (QQ) approach with causality tests in conditional quantiles, the results show that (i) energy prices heterogeneously affect agricultural commodities prices, which can be attributed to the dynamic nature of the agricultural commodity market, different energy price shocks, and distinct market conditions; (ii) energy has a mixed positive and negative impact on agricultural commodities; and (iii) at higher or lower quantiles, that is, under extreme bear or bull market conditions, energy markets are more likely to have a significant impact on agricultural markets. The asymmetry of these impacts on the prices of agricultural commodities necessitates the implementation of distinct policy measures for effective governance. The findings can inform such measures by accounting for changes in food quantiles and different price shocks from the three primary energy sources.

Received: 12 October 2024 | Revised: 6 December 2024 | Accepted: 27 February 2025

Conflicts of Interest

The authors declare that they have no conflicts of interest to this work.

Data Availability Statement

The datasets generated or analyzed during this study are available from the corresponding author on reasonable request.

Author Contribution Statement

Wei Jiang: Conceptualization, Methodology, Writing - review & editing, Funding acquisition. Shuqi Yuan: Software, Data curation, Writing - original draft, Visualization. Sonia Chien-I Chen: Supervision.