Oil And Food Commodities Prices. Oil prices effect on agricultural Term Paper

Oil And Food Commodities Prices. Oil prices effect on agricultural commodity prices in Latin American Nations - Term Paper Example To achieve this objective, this paper investigated the agricultural food prices for seven major farm products namely meat, oilseed, egg, rice, wheat, milk and sugar. On the other hand, the macroeconomic investigated were fossil crude oil prices, agricultural food prices indexes, GDP and consumer price index around Latin America as from 1963 to 2007. The study applied the use of Scree test and the magnitude of the variance method for measuring the optimal value of the common factors. The relationship coefficient that existed between the obtained principal function or component and the macro-economic index fluctuates between 0.87 for Latin America GDP and 0.36 for the consumer price index (CPI). According to the findings, agricultural food production index has the largest impacts on the macro-economic index and similarly the crude fossil oil has the greatest influence on the agricultural food production index and as a consequent, the prices of crude has a direct impacts and influence o n the agricultural food prices in Latin America. In the economic advancement process, food supply and its security are imperative issues. Therefore, food prices are an essential effective variable that have a direct effect on its supply and demand. Ever soaring food prices and cases of food riots across the globe and more important in Latin America have heightened concerns about the world food supply and food security. Food prices of major arable agricultural products