FAO says oil prices long-term drivers of ethanol and grain

December 16, 2013 |

In Italy, a new report from the FAO says oil prices are the long run drivers of ethanol and grains prices. Second, ethanol prices co-move with oil prices in the long run. However, in the short run, oil and ethanol prices are linked in a nonlinear manner. Ethanol prices appear to drift apart from the path as this is determined by oil prices, due to policy changes. Adjustment back to the long run equilibrium the path is rapid, less than two months, when the deviations are small. Large deviations take more time to be corrected.

Print Friendly, PDF & Email

Tags: , ,

Category: Fuels

Thank you for visting the Digest.