Corn Price Volatility in The World Market
Abstract
Corn is one of the food commodities traded globally as food, feed and biofuel commodities. Global demand for corn will tend to increase from year to year considering the multifunctional uses of corn. Climate change also take part in decreasing global production. Producer countries, namely China, America, and Brazil, suffered severe drought in 2020. It had impact in global corn market since the low of production. Globally, corn is used as food, but Indonesia imports corn as feed. Therefore, the price of corn in the global market is of concern to the Indonesian government. Fluctuations alone are not enough to describe the movement of corn prices, it is necessary to do a volatility analysis to find out how much uncertainty corn prices are in the global market. This study aims to determine the volatility of corn prices in the world market. The data used is secondary data obtained from the World Bank's Pink Sheet Data from 1960 to 2020. This study uses the econometric method using the ARIMA (Autoregressive Integrated Moving Average) and ARCH GARCH (Autoregressive Conditional Heteroscedasticity-Generalized Autoregressive Conditional Heteroscedasticity) model. The results showed that corn prices were volatile most of the year from 1960 to 2020.
References
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Chaudhry, I., Suleman, R., Bhatti, A., & Ullah, I. (2021). Review: Food price Fluctuations and Its Influence on Global Food Market. Annals of Social Sciences and Perspective, 2(1), 21–33. https://doi.org/10.52700/assap.v2i1.33
Chernova, V. Y., & Noha, V. I. (2019). A Study of the Characteristics of Food Import Dependence of The Countries. Amazonia Investiga, 8(24), 484–492.
Dhaliwal, D. S., & Williams, M. M. (2022). Evidence of Sweet Corn Yield Losses from Rising Temperatures. Scientific Reports, 12(1), 1–6. https://doi.org/10.1038/s41598-022-23237-2
Dybowski, G., & Bugala, A. (2016). Global Food Market - New Factors Influencing Development. AGROFOR International Journal, 1(2), 13–19. https://doi.org/10.7251/AGRENG1602013D
Ekpa, O., Palacios-Rojas, N., Fogliano, Kruseman, G., Fogliano, V., & Linnemann, A. R. (2019). Sub-Saharan African Maize-Based Foods - Processing Practices, Challenges and Opportunities. Food Reviews International, 35(7), 609–639. https://doi.org/10.1080/87559129.2019.1588290
Erdogan, S., Kartal, M. T., & Pata, U. K. (2024). Does Climate Change Cause an Upsurge in Food Prices? Foods, 13(1), 1–20. https://doi.org/10.3390/foods13010154
Evalia, N. A., Harianto, H., Nurmalina, R., & Hakim, D. B. (2022). Price Transmission Between Input and Output Markets: The Covid-19 Effect on Laying Hens’ Industry in Indonesia. Jurnal Manajemen Dan Agribisnis, 19(3), 418–427. https://doi.org/10.17358/jma.19.3.418
Firdaus, M. (2011). Aplikasi Ekonometrika untuk Data Panel dan Time Series. IPB Press.
Haile, M. G., Kalkuhl, M., & Von Braun, J. (2016). Worldwide Acreage and Yield Response to International Price Change and Volatility: A Dynamic Panel Data Analysis for Wheat, Rice, Corn, and Soybeans. American Journal of Agricultural Economics, 98(1), 172–190. https://doi.org/10.1093/ajae/aav013
Ji, G., Zhong, H., Feukam Nzudie, H. L., Wang, P., & Tian, P. (2024). The Structure, Dynamics, and Vulnerability of the Global Food Trade Network. Journal of Cleaner Production, 434, 140439. https://doi.org/https://doi.org/10.1016/j.jclepro.2023.140439
Klein, H. S., & Luna, F. V. (2022). The Impact of the Rise of Modern Maize Production in Brazil and Argentina. Historia Agraria, 86, 1–38. https://doi.org/10.26882/histagrar.086e09k
Kocak, E., Bilgili, F., Bulut, U., & Kuskaya, S. (2022). Is ethanol production responsible for the increase in corn prices? Renewable Energy, 199, 689–696. https://doi.org/https://doi.org/10.1016/j.renene.2022.08.146
Kotz, M., Kuik, F., Lis, E., & Nickel, C. (2024). Global Warming and Heat Extremes to Enhance Inflationary Pressures. Communications Earth and Environment, 5(1), 1–13. https://doi.org/10.1038/s43247-023-01173-x
Lee, J., & Durmaz, N. (2016). Impact of climate change on corn production in the U.S.: Evidence from panel study. Applied Econometrics and International Development, 16(1), 93–104.
Lobell, D. B., Roberts, M. J., Schlenker, W., Braun, N., Little, B. B., Rejesus, R. M., & Hammer, G. L. (2014). Greater Sensitivity to Drought Accompanies Maize Yield Increase in the U.S. Midwest. Science, 344(6183), 516–519. https://doi.org/10.1126/science.1251423
Malau, L. R. E., Rambe, K. R., Ulya, N. A., & Purba, A. G. (2023). The Impact Of Climate Change On Food Crop Production In Indonesia: Jurnal Penelitian Pertanian Terapan, 23(1), 34–46. https://doi.org/10.25181/jppt.v23i1.2418
Meng, H., & Qian, L. (2024). Performances of Different Yield-Detrending Methods in Assessing the Impacts of Agricultural Drought and Flooding: A Case Study in The Middle-and-Lower Reach of the Yangtze River, China. Agricultural Water Management, 296(July 2023), 108812. https://doi.org/10.1016/j.agwat.2024.108812
Osei, A.-A. A., Etuah, S., Nimoh, F., Owusu Asante, B., Abunyuwah, I., & Mensah, N. O. (2024). Does Fuel Price Volatility Induce Price Instability in the Agricultural Commodity Supply Chain? Empirical Evidence From Ghana. Journal of Agriculture and Food Research, 17(May), 101216. https://doi.org/10.1016/j.jafr.2024.101216
Qian, L., Meng, H., Chen, X., & Tang, R. (2023). Evaluating Agricultural Drought And Flood Abrupt Alternation: A Case Study Of Cotton In The Middle-And-Lower Yangtze River, China. Agricultural Water Management, 283(April), 108313. https://doi.org/10.1016/j.agwat.2023.108313
Rachmadhan, A. A., Kusnadi, N., & Adhi, A. K. (2020). Pengaruh Kebijakan Subsidi Pupuk terhadap Produksi Gula Kristal Putih Indonesia. Jurnal Agro Industri Perkebunan, 8(1), 9–19. https://doi.org/https://doi.org/10.25181/jaip.v8i1.1266
Rizkiyah, N., & Shofiyah, S. (2021). Strategi Pengembangan Ekonomi Lokal melalui Kawasan Desa Wisata Berbasis Komoditas Unggulan Kopi Liberika (Kba) di Desa Kumpai Batu Atas Kecamatan Arut Selatan Kabupaten Kotawaringin Barat. Mimbar Agribisnis, 7(2), 1572–1584. https://doi.org/10.25157/ma.v7i2.5513
Rozi, F., Santoso, A. B., Mahendri, I. G. A. P., Hutapea, R. T. P., Wamaer, D., Siagian, V., Elisabeth, D. A. A., Sugiono, S., Handoko, H., Subagio, H., & Syam, A. (2023). Indonesian Market Demand Patterns for Food Commodity Sources of Carbohydrates in Facing the Global Food Crisis. Heliyon, 9(6), e16809. https://doi.org/https://doi.org/10.1016/j.heliyon.2023.e16809
Ruccy, M. V., Suharno, S., & Asmarantaka, R. W. (2022). Analisis Tingkat Ketergantungan Impor pada Industri Susu Indonesia. Jurnal Agribisnis Indonesia, 10(1), 101–112. https://doi.org/10.29244/jai.2022.10.1.101-112
Sholihah, F., & Kusnadi, N. (2019). Dampak Pengembangan Biofuels Terhadap Volatilitas Harga Beberapa Komoditas Pangan di Pasar Dunia. Jurnal Agro Ekonomi, 37(2), 157–170. https://doi.org/http://dx.doi.org/10.21082/jae.v37n2.2019.157-170
Taghizadeh-Hesary, F., Rasoulinezhad, E., & Yoshino, N. (2019). Energy and Food Security: Linkages through Price Volatility. Energy Policy, 128, 796–806. https://doi.org/10.1016/j.enpol.2018.12.043
Widarjono, A. (2018). Ekonometrika: Pengantar dan Aplikasinya, Disertai Panduan EViews. UPP STIM YKPN.
Wijayati, P. D., Harianto, & Suryana, A. (2019). Permintaan Pangan Sumber Karbohidrat di Indonesia. Analisis Kebijakan Pertanian, 17(1), 13–26. https://doi.org/10.21082/akp.v17n1.2019.13-26
Wijayati, P. D., Laily, D., & Atasa, D. (2022). Volatilitas Harga Pangan pokok di Pasar Global Sebagai Dampak Pandemi COVID-19 dan Resesi Ekonomi Dunia. AGROMIX, 13(1), 89–103. https://doi.org/10.35891/agx.v13i1.2874
World Bank. (2022). World Bank Commodity Price Data (The Pink Sheet). https://www.worldbank.org/en/research/commodity-markets
[USDA] US Department of Agriculture. (2018). Corn, Disappearance, and Share of Total Corn Used for Ethanol. Corn, Disappearance, and Share of Total Corn Used for Ethanol. www.ers.usda.gov
Adamchick, J., & Perez, A. M. (2020). Choosing Awareness Over Fear: Risk Analysis and Free Trade Support Global Food Security. Global Food Security, 26(September), 100445. https://doi.org/10.1016/j.gfs.2020.100445
Al-Maadid, A., Caporale, G. M., Spagnolo, F., & Spagnolo, N. (2017). Spillover Between Food and Energy Prices and Structural Breaks. International Economics, 150, 1–18. https://doi.org/10.1016/j.inteco.2016.06.005
Birgani, R. A., Kianirad, A., Shab-Bidar, S., Djazayeri, A., Pouraram, H., & Takian, A. (2022). Climate Change and Food Price: A Systematic Review and Meta-Analysis of Observational Studies, 1990-2021. American Journal of Climate Change, 11(02), 103–132. https://doi.org/10.4236/ajcc.2022.112006
Chaudhry, I., Suleman, R., Bhatti, A., & Ullah, I. (2021). Review: Food price Fluctuations and Its Influence on Global Food Market. Annals of Social Sciences and Perspective, 2(1), 21–33. https://doi.org/10.52700/assap.v2i1.33
Chernova, V. Y., & Noha, V. I. (2019). A Study of the Characteristics of Food Import Dependence of The Countries. Amazonia Investiga, 8(24), 484–492.
Dhaliwal, D. S., & Williams, M. M. (2022). Evidence of Sweet Corn Yield Losses from Rising Temperatures. Scientific Reports, 12(1), 1–6. https://doi.org/10.1038/s41598-022-23237-2
Dybowski, G., & Bugala, A. (2016). Global Food Market - New Factors Influencing Development. AGROFOR International Journal, 1(2), 13–19. https://doi.org/10.7251/AGRENG1602013D
Ekpa, O., Palacios-Rojas, N., Fogliano, Kruseman, G., Fogliano, V., & Linnemann, A. R. (2019). Sub-Saharan African Maize-Based Foods - Processing Practices, Challenges and Opportunities. Food Reviews International, 35(7), 609–639. https://doi.org/10.1080/87559129.2019.1588290
Erdogan, S., Kartal, M. T., & Pata, U. K. (2024). Does Climate Change Cause an Upsurge in Food Prices? Foods, 13(1), 1–20. https://doi.org/10.3390/foods13010154
Evalia, N. A., Harianto, H., Nurmalina, R., & Hakim, D. B. (2022). Price Transmission Between Input and Output Markets: The Covid-19 Effect on Laying Hens’ Industry in Indonesia. Jurnal Manajemen Dan Agribisnis, 19(3), 418–427. https://doi.org/10.17358/jma.19.3.418
Firdaus, M. (2011). Aplikasi Ekonometrika untuk Data Panel dan Time Series. IPB Press.
Haile, M. G., Kalkuhl, M., & Von Braun, J. (2016). Worldwide Acreage and Yield Response to International Price Change and Volatility: A Dynamic Panel Data Analysis for Wheat, Rice, Corn, and Soybeans. American Journal of Agricultural Economics, 98(1), 172–190. https://doi.org/10.1093/ajae/aav013
Ji, G., Zhong, H., Feukam Nzudie, H. L., Wang, P., & Tian, P. (2024). The Structure, Dynamics, and Vulnerability of the Global Food Trade Network. Journal of Cleaner Production, 434, 140439. https://doi.org/https://doi.org/10.1016/j.jclepro.2023.140439
Klein, H. S., & Luna, F. V. (2022). The Impact of the Rise of Modern Maize Production in Brazil and Argentina. Historia Agraria, 86, 1–38. https://doi.org/10.26882/histagrar.086e09k
Kocak, E., Bilgili, F., Bulut, U., & Kuskaya, S. (2022). Is ethanol production responsible for the increase in corn prices? Renewable Energy, 199, 689–696. https://doi.org/https://doi.org/10.1016/j.renene.2022.08.146
Kotz, M., Kuik, F., Lis, E., & Nickel, C. (2024). Global Warming and Heat Extremes to Enhance Inflationary Pressures. Communications Earth and Environment, 5(1), 1–13. https://doi.org/10.1038/s43247-023-01173-x
Lee, J., & Durmaz, N. (2016). Impact of climate change on corn production in the U.S.: Evidence from panel study. Applied Econometrics and International Development, 16(1), 93–104.
Lobell, D. B., Roberts, M. J., Schlenker, W., Braun, N., Little, B. B., Rejesus, R. M., & Hammer, G. L. (2014). Greater Sensitivity to Drought Accompanies Maize Yield Increase in the U.S. Midwest. Science, 344(6183), 516–519. https://doi.org/10.1126/science.1251423
Malau, L. R. E., Rambe, K. R., Ulya, N. A., & Purba, A. G. (2023). The Impact Of Climate Change On Food Crop Production In Indonesia: Jurnal Penelitian Pertanian Terapan, 23(1), 34–46. https://doi.org/10.25181/jppt.v23i1.2418
Meng, H., & Qian, L. (2024). Performances of Different Yield-Detrending Methods in Assessing the Impacts of Agricultural Drought and Flooding: A Case Study in The Middle-and-Lower Reach of the Yangtze River, China. Agricultural Water Management, 296(July 2023), 108812. https://doi.org/10.1016/j.agwat.2024.108812
Osei, A.-A. A., Etuah, S., Nimoh, F., Owusu Asante, B., Abunyuwah, I., & Mensah, N. O. (2024). Does Fuel Price Volatility Induce Price Instability in the Agricultural Commodity Supply Chain? Empirical Evidence From Ghana. Journal of Agriculture and Food Research, 17(May), 101216. https://doi.org/10.1016/j.jafr.2024.101216
Qian, L., Meng, H., Chen, X., & Tang, R. (2023). Evaluating Agricultural Drought And Flood Abrupt Alternation: A Case Study Of Cotton In The Middle-And-Lower Yangtze River, China. Agricultural Water Management, 283(April), 108313. https://doi.org/10.1016/j.agwat.2023.108313
Rachmadhan, A. A., Kusnadi, N., & Adhi, A. K. (2020). Pengaruh Kebijakan Subsidi Pupuk terhadap Produksi Gula Kristal Putih Indonesia. Jurnal Agro Industri Perkebunan, 8(1), 9–19. https://doi.org/https://doi.org/10.25181/jaip.v8i1.1266
Rizkiyah, N., & Shofiyah, S. (2021). Strategi Pengembangan Ekonomi Lokal melalui Kawasan Desa Wisata Berbasis Komoditas Unggulan Kopi Liberika (Kba) di Desa Kumpai Batu Atas Kecamatan Arut Selatan Kabupaten Kotawaringin Barat. Mimbar Agribisnis, 7(2), 1572–1584. https://doi.org/10.25157/ma.v7i2.5513
Rozi, F., Santoso, A. B., Mahendri, I. G. A. P., Hutapea, R. T. P., Wamaer, D., Siagian, V., Elisabeth, D. A. A., Sugiono, S., Handoko, H., Subagio, H., & Syam, A. (2023). Indonesian Market Demand Patterns for Food Commodity Sources of Carbohydrates in Facing the Global Food Crisis. Heliyon, 9(6), e16809. https://doi.org/https://doi.org/10.1016/j.heliyon.2023.e16809
Ruccy, M. V., Suharno, S., & Asmarantaka, R. W. (2022). Analisis Tingkat Ketergantungan Impor pada Industri Susu Indonesia. Jurnal Agribisnis Indonesia, 10(1), 101–112. https://doi.org/10.29244/jai.2022.10.1.101-112
Sholihah, F., & Kusnadi, N. (2019). Dampak Pengembangan Biofuels Terhadap Volatilitas Harga Beberapa Komoditas Pangan di Pasar Dunia. Jurnal Agro Ekonomi, 37(2), 157–170. https://doi.org/http://dx.doi.org/10.21082/jae.v37n2.2019.157-170
Taghizadeh-Hesary, F., Rasoulinezhad, E., & Yoshino, N. (2019). Energy and Food Security: Linkages through Price Volatility. Energy Policy, 128, 796–806. https://doi.org/10.1016/j.enpol.2018.12.043
Widarjono, A. (2018). Ekonometrika: Pengantar dan Aplikasinya, Disertai Panduan EViews. UPP STIM YKPN.
Wijayati, P. D., Harianto, & Suryana, A. (2019). Permintaan Pangan Sumber Karbohidrat di Indonesia. Analisis Kebijakan Pertanian, 17(1), 13–26. https://doi.org/10.21082/akp.v17n1.2019.13-26
Wijayati, P. D., Laily, D., & Atasa, D. (2022). Volatilitas Harga Pangan pokok di Pasar Global Sebagai Dampak Pandemi COVID-19 dan Resesi Ekonomi Dunia. AGROMIX, 13(1), 89–103. https://doi.org/10.35891/agx.v13i1.2874
World Bank. (2022). World Bank Commodity Price Data (The Pink Sheet). https://www.worldbank.org/en/research/commodity-markets
Published
2024-11-19
How to Cite
WIJAYATI, Prasmita Dian; RACHMADHAN, Aditya Arief; RIZKIYAH, Noor.
Corn Price Volatility in The World Market.
JSEP (Journal of Social and Agricultural Economics), [S.l.], v. 17, n. 2, p. 181-190, nov. 2024.
ISSN 2356-2382.
Available at: <https://jurnal.unej.ac.id/index.php/JSEP/article/view/48312>. Date accessed: 21 nov. 2024.
doi: https://doi.org/10.19184/jsep.v17i2.48312.
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Articles
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