Grassroots Journal of Natural Resources

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VOLUME 7, ISSUE 2 (AUGUST 2024) | Grassroots Journal of Natural Resources

Coordinated and published by The Grassroots Institute, the Grassroots Journal of Natural Resources (GJNR) is an international journal dedicated to the latest advancements in natural resources throughout the world. The goal of this journal is to provide a platform for scientists, social scientists, policy analysts, managers and practitioners (on all academic and professional levels) all over the world to promote, discuss and share various new issues and developments in different arenas of natural resources.

VOLUME 7, ISSUE 2 (AUGUST 2024)

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M – 00409Analytical Article

Is the Movement of Fertilizer and Food Commodity Prices Unidirectional? A Frequency Domain Causality Approach

Desta Bati Nuno

Department of Statistics, College of Computing and Informatics, Haramaya University, Dire Dawa, Ethiopia.

Email: destabati8@gmail.com | ORCID: https://orcid.org/0000-0002-6660-8671

Grassroots Journal of Natural Resources, 7(2): 274-287. Doi: https://doi.org/10.33002/nr2581.6853.070214

Received: 12 August 2023

Reviewed: 30 May 2024

Provisionally Accepted: 01 June 2024

Revised: 23 June 2024

Finally Accepted: 25 June 2024

Published: 10 August 2024


                                    

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ABSTRACT

The 2008 economic crisis made food price to be doubled and currently the Ukraine-Russia war has resulted to higher food prices and costs of agricultural inputs like fertilizers are, thereby, drawing significant attention from scholars. This study was aimed at investigating the linkages between fertilizer prices and categorized food commodity prices using monthly data from January 1980 to May 2023. Relevant data was collected from primary and secondary sources. The Zivot–Andrew’s unit root test, the Toda-Yamamoto time-domain causality test, and the frequency domain causality test were conducted for data analysis. Findings show that, at 5% significance level, grain prices induce the fertilizer price for all frequencies in the intervals of 0 to 3.14. This result suggests that there is both long-term and short-term causality from grains price index to fertilizer price index. In addition to this, fertilizer price causes the grains price for frequencies in the intervals of 1.08–1.64 and 2.71–3.14. These results indicate that fertilizer prices play a great role in predicting grain prices and have bidirectional causality with grain price. Furthermore, the empirical result from this study also reveals that fertilizer price index does not granger-cause the oil prices and other food prices for all frequencies in the intervals of 0-3.14, at 5% significance level. These results imply that fertilizer prices have no short-run and long-run causal relationship with oil prices and other food prices.

Keywords

Bidirectional causality; Frequency domain; Time-domain; Toda–Yamamoto

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HOW TO CITE THIS PAPER?
Harvard Style

Nuno, D.B. (2024). Is the Movement of Fertilizer and Food Commodity Prices Unidirectional? A Frequency Domain Causality Approach. Grassroots Journal of Natural Resources, 7(2): 274-287. Doi: https://doi.org/10.33002/nr2581.6853.070214

APA Style

Nuno, D.B. (2024). Is the Movement of Fertilizer and Food Commodity Prices Unidirectional? A Frequency Domain Causality Approach. Grassroots Journal of Natural Resources, 7(2), 274-287. https://doi.org/10.33002/nr2581.6853.070214

ACS Style

Nuno D.B. Is the Movement of Fertilizer and Food Commodity Prices Unidirectional? A Frequency Domain Causality Approach. Grassroots Journal of Natural Resources, 2024, 7 (2), 274-287. https://doi.org/10.33002/nr2581.6853.070214

Chicago/Turabian Style

Nuno, Desta Bati. 2024. “Is the Movement of Fertilizer and Food Commodity Prices Unidirectional? A Frequency Domain Causality Approach”. Grassroots Journal of Natural Resources, 7 no.2: 274-287. https://doi.org/10.33002/nr2581.6853.070214

AAA Style

Nuno, Desta Bati. 2024. “Is the Movement of Fertilizer and Food Commodity Prices Unidirectional? A Frequency Domain Causality Approach”. Grassroots Journal of Natural Resources, 7 (2): 274-287. https://doi.org/10.33002/nr2581.6853.070214

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