Oil Spills on Other Commodities
This paper examines the effect of crude oil prices on the prices of 35 internationally traded primary commodities for the 1960-2005 period. It finds that the pass-through of crude oil price changes to the overall non-energy commodity index is 0.16....
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/08/8185009/oil-spills-other-commodities http://hdl.handle.net/10986/7319 |
| Summary: | This paper examines the effect of crude
oil prices on the prices of 35 internationally traded
primary commodities for the 1960-2005 period. It finds that
the pass-through of crude oil price changes to the overall
non-energy commodity index is 0.16. At a more disaggregated
level, the fertilizer index had the highest pass-through
(0.33), followed by agriculture (0.17), and metals (0.11).
The prices of precious metals also exhibited a strong
response to the crude oil price. In terms of individual
commodities, the estimates of the food group exhibited
remarkable similarity while those of raw materials and
metals gave a mixed picture. The implication is that if
crude oil prices remain high for some time, as most analysts
expect, then the recent commodity price boom is likely to
last much longer than earlier booms, at least for food
commodities. The other commodities, however, are likely to
follow diverging paths. On the methodological side, the
results show that price indices, while providing useful
summary statistics, need to be supplemented by individual
commodity analysis. |
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