Food versus fuel: An updated and expanded evidence

This paper replicates and extends the study of Zhang et al. (2010): “Food versus fuel:
What do prices tell us?” Energy Policy 38, pp. 445-451. We confirm the findings of the
original paper that there was only a weak relationship between ethanol and food
commodities in the period between March 1989 and July 2008. In addition, we extend
that study and examine the cointegration relationship between biofuels and related
commodities for a considerably enlarged dataset (3 vs. 1 market, 26 vs. 8 commodities,
analysis up till 2017 vs. 2008, weekly vs. monthly data frequency). Focusing on the
biofuel markets of Brazil, the EU and the USA in the three separate periods before,
during, and after the food crisis of 2007 and 2008, we show that studying the time
variation of the relationships plays an essential role in their proper understanding. Our
results help to clarify the wide extensive discussion about the role of biofuels prices in
food shortages manifested particularly during the food crises. In agreement with the
original study, we confirm that price series data do not support strong statements about
biofuels uniformly serving as main leading source of high food prices and consequently
the food shortages.