Commodities, Volume 1, Issue 2 (December 2022) – 7 articles

Energy and grain markets are historically connected since oil, natural gas, and/or coal are used as inputs for fertilizers’ production or transportation costs. The recent rising prices in the energy market following important events such as the COVID-19 pandemic and the Russia-Ukraine conflict have again brought attention to researchers. The focus of this paper is to assess any changes in the relationships between crude oil, natural gas, and grain prices contributing to the review of the fuel-food relationship using time series models. Several techniques that account for structural breaks and regime shifts (Zivot-Andrews and Clemente, Montañés, Reyes unit root tests, Johansen’s cointegration test, and Toda-Yamamoto time domain causality test with time dummy variables for structural breaks, and Hatemi-J asymmetric causality test) are applied for monthly data covering the period from January 1982 to September 2022. The main result is that the neutrality hypothesis is still valid in light of recent developments in the respective markets (no significant linear causality and asymmetric causality were detected among the series). Full article

The objective of the present research was to determine the external influence of the grain trade, i.e., the influence of Ukraine’s grain trade through Romania on price levels recorded at Romania’s borders. The research methods to achieve this objective consisted of quantitative and qualitative analyses of wheat and maize imports and export data from the beginning of 2022 to the present, as well as using the t-stat test to determine the existence of significant price differences, and the linear regression model. The research results confirm that there were differences between the two pre- and post-military conflict periods regarding the volume of imports from Ukraine and the increase in the supply of wheat and maize from Romania, through this trade activity, led to changes in prices. Full article

The natural resource commodity price paradox is a phenomenon that has been observed in the past. The price of a commodity constantly and unpredictably fluctuates. This phenomenon makes it difficult for businesses to plan for future needs and investments. This study examined the relationship between natural resource commodity prices, renewable energy demand, economic growth, high-technology exports, inbound FDI, and greenhouse gas (GHG) emissions in Pakistan, using the 1975 to 2020 time period. The robust least squares (RLS) regression results showed that natural resource commodity prices and economic growth increased GHG emissions. In contrast, there was a negative relationship between renewable energy demand (and high-tech exports) and GHG emissions in Pakistan. The results verified the resource price curse hypothesis and growth-associated emissions in a country. The Granger causality estimates showed the unidirectional relationship of renewable energy consumption with GHG emissions, natural resource pricing, and inbound FDI. Further, high-technology exports Granger caused GHG emissions and GDP per capita. The results verified the country’s growth-led green energy sources and inbound FDI, resource pricing-led inbound FDI, and GHG emissions-led resource pricing. The impulse response function suggested that resource commodity pricing and the country’s economic growth will likely increase GHG emissions in the next ten years. At the same time, green energy demand, technological advancements, and sustainable investment in cleaner production would help decrease GHG emissions over time. The variance decomposition analysis suggested that technology advancements would likely have greater variance shock on GHG emissions, followed by commodity resource pricing and green energy demand. The resource price paradox hampers economic and environmental outcomes, which need to be resolved through advancement in cleaner production technologies, adoption of green energy demand, and stabilization of resource commodity pricing that helps to move forward toward the sustainable development of the country. Full article

Increasing levels of carbon emissions have been a growing concern worldwide because of their adverse environmental effects. In that context, this paper examines the association between different categories of trade and carbon dioxide emissions. In particular, we analyze whether total trade, commodity trade, and service trade affect the environment differently. The analysis is based on panel data for 147 developing countries for the period from 1960 to 2020. Methodologically, the fixed-effects model, as suggested by the Hausman test, is used to examine the relationships. We present two main conclusions: (1) overall trade increases CO₂ emissions, and (2) commodity trade contributes to higher levels of CO₂ emissions than service trade. These results have important policy implications—climate change policies should target commodity trade sectors to help reduce environmental carbon emissions. Full article

Lithium has emerged as a key commodity in the clean energy transition, with demand for the mineral set to soar as low-carbon technologies grow more advanced and widely deployed. Under the motto of the energy transition and a decarbonization of the economy, governments and mining industries seek agreements for the granting of prospecting licenses around the World, defining then the ones that will extend to exploration. New investments in photovoltaic solar exploitations, research in the fields of secondary batteries, thermonuclear power generation, and the fever of the electric car are some of the main uses and exerts pressure regarding the availability, in sufficient quantities, of lithium. Consequently, concern over environmental impacts and undefined local social benefits are alarming residents in rural areas and non-governmental organizations. Therefore, the concern for the environmental impacts and the undefined local social benefits are alarming residents in rural areas and non-governmental organizations. This article reflects on the situation in Portugal, making an economic, energic, environmental and social balance. The article uses the international experience to strengthen the study. In the absence of case studies in Portugal, an analogy with quarry exploitation will be used, whose impacts are similar. The present paper explains why Portugal is currently the key country for lithium exploration in the world, despite it being 7th in the world with regard to lithium reserves. Taking into consideration all parts and the best practices in the world, and if environmental and social concerns are resolved, mining is a good opportunity for Portugal as a Country and for the local population at risk of desertification areas, in the author’s opinion. Full article

Natural resources and ecological services provide the foundation for manufactured capital, increasing public financing and decreasing inequality by diversifying the economy. The exploitation of natural resources is frequently the backbone of economic stability in developing and middle-income nations. As a result of their importance, natural resources need vigilant and long-term management. Recent research has tested two hypotheses, the natural resource blessing hypothesis and the natural resource curse hypothesis, on the impact of a country’s natural resources on its economy. This research is an essential contribution to the growing body of work that attempts to quantify natural resource endowments’ role in national economic growth. Investigations focus on Pakistan and span the years 1975 through 2020. Robust Least Square (RLS) estimations show that coal rents, energy use, inbound FDI, and oil rents contribute to a country’s economic growth. While consumption of renewable energy sources and industrial value-added have a detrimental effect. Natural resources, foreign direct investment, energy consumption, and industrial ecology are predicted to significantly impact economic growth during the next decade, according to the Impulse Response Function (IRF) and the Variance Decomposition Analysis (VDA). The findings may provide helpful information for academic and governmental institutions to develop natural resource management policies for sustainable development. Full article