Abstract:

Purpose: On February 24, 2022, Russia's invasion of Ukraine caused food supply problems across the globe. This study intends to highlight the reasons for the recent changes in global food prices and the increase in inflation. Design/Methodology/Approach: The main reference materials for this study are food price indices Brent Petroleum Barrel Prices, food supplies, and Fertilizer Prices for the period 1990:01-2022:M04 across the world. The empirical analyses are based on the Fourier ADF unit root test of Enders and Lee (2012), the Fourier Bootstrap ARDL method of Solarin (2019), and Nazlıoğlu et al. (2016) Fourier Bootstrap Toda-Yamamoto causality test. Findings: The analyses showed that a 1% increase in global petroleum prices pushes up grain prices by 0.5%, meat prices by 0.61%, oil prices by 0.11%, and sugar prices by 0.59%. When the quantity of products supplied worldwide increases by 1%, grain prices decrease by 0.05%, dairy prices by 0.13%, oil prices by 0.01%, and sugar prices by 0.48%. A 1% increase in fertilizer prices pushes up grain prices by 2.25%, oil prices by 0.44%, and sugar prices by 2.40%. It is also shown that there are causality relationships between petroleum prices to dairy and meat prices, supply amount to oil and sugar prices, and fertilizer prices to grain, meat, and oil prices. Originality/Value: Expected to be useful to policy makers as it provides evidence-based insights into the issues that need to be considered in reducing global food inflation. Key words: Food Prices, Petroleum Prices, Fertilizer Prices, Supply, Fourier ADF Unit Root Test, Fourier Bootstrap ARDL, Fourier Bootstrap Toda-Yamamoto Causality Test.

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