Structural Changes in Commodity Prices: The Role of Policies

Food commodity prices have recently increased sharply and become more volatile, highlighting greater uncertainty in markets and serious implications for food security among the poor globally. High fuel prices combined with legislative policies have increased biofuel production causing high food prices and establishing a link between fuel and agricultural prices. This research analyses the role of biofuel, agricultural and energy policies in affecting the relationships between agricultural and energy commodity prices over the last decade. The presence and the nature of structural breaks are empirically. This research finds that structural changes in the prices and price relationships are policy-driven.