What are the long-term drivers of food prices? Investigating improvements in the accuracy of prediction intervals for the forecast of food prices

Over the last few years, the prices of the main agricultural raw materials have been highly volatile. The situation is unprecedented, both in the magnitude of the upward and downward volatility observed, and in the number of agricultural commodities affected. Various factors are contributing to these contrasting shifts: the role of emerging countries, changing dietary habits, an increase in energy demand related to the boom in biofuels, adverse weather conditions and speculation. In this paper we try to capture long-term relationships between crop prices and crude oil price using a partial equilibrium and times series method. The study finds little empirical evidence that the crude oil price have a significant influence on the variation of major vegetable crops price