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Economics Research International
Volume 2013 (2013), Article ID 694507, 15 pages
http://dx.doi.org/10.1155/2013/694507
Review Article

Commodity Food Prices: Review and Empirics

1Department of Business Administration of Food and Agricultural Products, University of Western Greece, G. Seferi 2, 30110 Agrinio, Greece
2Department of Economics and Management, University of Pavia, Via S. Felice 5, 27100 Pavia, Italy

Received 10 January 2013; Accepted 7 February 2013

Academic Editor: José M. Gil

Copyright © 2013 Anthony N. Rezitis and Maria Sassi. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

The present paper provides a literature review of studies examining the potential causes and consequences of recent surges in food and agricultural commodity prices. Furthermore, this paper uses the structural trend methodology proposed by Koopman et al. (2009) to analyze movements in the IMF monthly commodity food price index for the period 1992(11)–2012(10) and to provide forecasts for the period 2012(11)–2014(12). The empirical results indicate that commodity food prices present seasonality and cyclicality with the longest periodicity of two years. The empirical findings identify certain structural breaks in commodity food price series as well as outliers. These structural breaks seem to capture the trend component of the price series well, while the outliers take account of temporal effects, that is, short-lived spikes. Finally, the presented forecasts show high and volatile commodity food prices.