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Disruptive business environment such as the Covid-19 pandemic and the recent high volatility in commodity prices has changed the way businesses were conducted. The heavy equipment industry is one of many industries affected by such an environment, especially those who are related to the mining industry where the volatility of the commodity prices has a significant impact on their business performance. Alliances are commonly formed by heavy equipment distributors and their customers to create a mutual benefit to sustain their performance. Strategic alliances have attracted substantial attention from industry as well as academia as a way to stay competitive. They mostly focus on the partner-to-partner alliances in serving their customers. Consumer behaviour has changed due to changes in the environment that make firms' strategic focus more on human-centric business approaches. This study looks at the roles of the partner-to-customer alliances, innovation capability, and cost reduction toward customer loyalty and competitive advantage. Data was collected from 335 respondents from the firms that have entered into alliances. This study finds strategic alliances have the highest association with cost reduction, followed by their association with innovation capability. They enhance customer loyalty through innovation capability. Cost reduction is not a lever to develop customer loyalty in the partner-to-customer relationship. The study also confirms that operational efficiencies are necessarily the source of competitive advantage, but strategic alliances are. © 2022, Academic Conferences and Publishing International Limited. All right reserved.
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The negative socio-economic consequences of the COVID-19 pandemic are widely discussed. However, relatively less attention is paid to its impact on the world commodity price formation including energy and food prices. The aim of this paper is to examine the impact of the COVID-19 pandemic on world energy commodity prices and their interactions with world food commodity prices. Using the World Bank data on commodity prices we look for evidence of changes in energy and food prices caused by occurrence of the COVID-19 pandemic, which was assumed to be a negative shock to the global economy in terms of both supply and demand. Based on data series analysis of indices of world energy and food commodity prices, it is evident that after the outbreak of the COVID-19 pandemic the energy prices, especially oil prices, plummeted. Food prices followed the same direction;however, their plunge was much less extreme. In general, it can be concluded that the pandemic caused a severe energy price shock which clearly had a negative impact on global economic growth, but the scale of this impact differs depending on the type of economic sector and countries' net export positions in energy and food trade. © 2023 by the authors.
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PurposeThe study aims to examine the relationship among economic policy uncertainty (EPU), geopolitical-risks (GPR), the interaction (EPGR) of EPU and GPR and the returns of gold, silver, platinum, palladium and rhodium using monthly data from January (1997) to May (2021).Design/methodology/approachThe paper employs the Markov-switching and the novel Shi et al. (2020) bootstrap time-varying Granger-causality approach.FindingsThough the Markov-switching shows variation in the responses of precious metals to EPU, GPR and EPGR across low and high states, the paper observes the safe-haven potential of the precious metals in the high regime while the hedging potency is also evident in the results. To further substantiate the safe-haven and hedging properties, the time-varying Granger-causality shows the causal effect of EPU on all the selected precious metal returns coinciding with global events. While the authors show that GPR Granger causes platinum, palladium and rhodium consistently under the rolling/recursive-evolving tests, the authors cannot find the causal effect of GPR on gold and silver returns across the algorithms. The paper also observes persistence in the causal effect of EPGR on palladium and platinum across all the algorithms, while gold and rhodium only show consistency in the responses under the rolling- and recursive-evolving algorithms given the conditions of homoscedasticity and heteroscedasticity.Practical implicationsThe authors' results are essential to investors and policymakers since both typically leverage the hedging and safe-haven characteristics of precious metals to obviate downside risks during highly uncertain periods.Originality/valueThe authors' techniques allow examining the hedging and safe-haven properties of precious metals across regimes and date-stamp critical periods of causation inherent in the relationship.
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The current outbreak and the financial crisis occurred due to Coronavirus (COVID‐19);the global economy is melting like an ice-cream. This current pandemic and the market condition have affected not only the human but also greatly impacted the commodities prices, demand & supply especially into the industry those which believes on the traditional way of working such as oil & gas and other energy sectors. If I will talk about only the oil and Gas or Petroleum industry, then based on the current market information and statistics then the short team impact is nearly 25% to 30% decrease in the petroleum consumptions, but the long-term impact can be even more than 35% to 40%. The CAPEX and OPEX investment for research and development have been slashed like anything. When the world started investing into the other source of energy then it has started forcing oil and gas industry to think out of the box and industry must change rapidly prior to losing a substantial market share because of orthodox thinking in terms of utilizing the available technology or investing in the future technologies. This paper will discuss about the way how to shift the whole industry from man oriented to machine oriented, uses of traditional technologies to the modern technologies and implementation of digitization and automation of running plant as well as upcoming projects starting in the earliest phase e.g., Feasibility study, Pre-Feed, FEED and EPC stage (including Pre-Commissioning/Commissioning) and the operation phase of the projects. Copyright © 2022, International Petroleum Technology Conference.
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One of the problems experienced by micro, small, and medium enterprises (MSMEs) during this pandemic is that most MSME actors do not understand plan-making during a crisis. This situation was exacerbated by erratic commodity prices, which resulted in several MSME players choosing to temporarily close because their turnover got a drastic decline. To help MSME actors maintain their business by knowing commodity price predictions, we propose a deep learning model using the long short-term memory (LSTM) method to predict commodity prices in Indonesia. LSTM is a type of recurrent neural network (RNN) with a memory cell to store information and solve the vanishing gradient problem in RNN. Furthermore, multivariate LSTM leverages the model to predict datasets with more than one feature. This study used a dataset collected from the Pusat Informasi Harga Pangan Strategis Nasional (PIHPS Nasional) managed by the Indonesian Ministry of Finance and Bank Indonesia consisting of significantly contributed food commodities to the formation of (strategic) inflation rates in Indonesia. The time range of commodity prices is from August 1, 2017, to July 30, 2021. There are 11 commodity price features in the dataset, namely, rice, chicken meat, eggs, onions, garlic, large red chilies, curly red chilies, red chilies, green chilies, cooking oil, and sugar. The lowest mean absolute error (MAE) on prediction is up to 255.998 obtained by the attention multivariate LSTM model with the Adam optimizer, adding batch normalization (Batchnorm) layer, reducing LSTM layer, hidden size, and grouped features. It makes the prediction more accurate and avoids overfitting and underfitting in this case. IEEE
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This study aims to determine the effect of Bitcoin price, world commodity prices such as gold and crude oil, as well as the number of active cases of Covid-19 in Indonesia on the volatility of the Indonesia Stock Exchange. This study uses quantitative methods and the data collection used is secondary data with daily data and the period from March 2, 2020 - March 2, 2022. The number of observations used in this study amounted to 477 observations. Secondary data sources are obtained through the Yahoo Finance website and the official WHO website. The data processing technique will be carried out using Stata 16 software and using the Multiple Linear Regression method and also the Classical Assumption Test. The results of this study show that the price of Bitcoin, the price of gold, Crude oil prices have a positive and significant effect on the volatility of the Indonesia Stock Exchange and only the number of active cases of Covid-19 in Indonesia has a positive but not significant effect. This indicates that Bitcoin prices, world gold prices, and world oil prices are good market indicators. In this case, the results found can be useful information for investors and portfolio managers when they want to invest in the Indonesia Stock Exchange, especially in uncertain periods such as during the Covid-19 pandemic. © 2022 ACM.
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Open‐air marketplaces are vital to food security, livelihoods, and the national economy in Papua New Guinea (PNG). Over the past 60 years, rapid growth of urban populations, changes in global commodity prices, and the decline in value of the PNG currency have stimulated demand for domestic fresh food. Selling fresh food in marketplaces has also become an attractive way to earn money for rural producers, whose returns on labour on their export crops have declined, and for urban residents struggling to make a living. This in turn has led to significant changes in PNGʼs marketplaces: spatial and temporal changes, changes in what is bought and sold, changes in who is selling, and changes in how food is transacted. In this paper, we bring together research on PNGʼs marketplaces from between 1961 and 2022 to document these changes and their causes, alongside important continuities, and to examine the implications and substantial gaps in our knowledge.
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Indica and japonica rice are commonly subjected to different market structures, and the international prices for both subspecies display different trends. The global indica and japonica rice markets in the mid and long term under climate change conditions were projected by the Rice Economy Climate Change (RECC) model. Additionally, endogenous agricultural investments were incorporated into the projections. A COVID-19 pandemic scenario was stimulated to observe its impact on the global indica and japonica rice markets. The results indicated that agricultural investments are expected to decrease in many indica rice-producing countries, whereas the investments will increase in many japonica riceproducing countries in the long term. Therefore, the global indica rice production will decrease due to its investment reduction;however, global japonica rice production will increase in the mid and long term. Due to the COVID-19 scenario, the international indica and japonica rice prices would decrease in 2020 due to the unprecedented shrinking economies worldwide, but the prices would increase from 2021 to 2040 compared with the baseline average of the price projections with the RECC model. The scenario simulation results reveal that the japonica rice markets are projected to have less impact than the indica rice markets from the COVID-19 pandemic © 2022, Japan Agricultural Research Quarterly.All Rights Reserved.
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Since the outbreak of the COVID-19 pandemic, a growing body of literature has focused on the impact of the uncertainty of the world pandemic (WPU) on commodity prices. Using the quarterly data from the first quarter of 2008 to the second quarter of 2020, we run the TVP-SVAR-SV model to study the time-varying impact of WPU on China's commodity prices. Specifically, we select minerals, non-ferrous metals, energy and steel commodities for a categorical comparison and measure the impact of WPU accordingly. The findings are as follows. First, WPU has a significant time-varying impact on China's commodity prices, and the short-term effect is greater than the long-term effect. Second, compared with the global financial crisis in the fourth quarter of 2008 and China's stock market crash in the second quarter of 2015, WPU had a greatest impact on Chinese commodity prices during the COVID-19 pandemic event in the fourth quarter of 2019. Third, significant differences exist in the impact of WPU on the four major commodity prices. Among them, WPU has the largest time-varying impact on the price of minerals but the smallest time-varying impact on that of steel.
Subject(s)
COVID-19 , Pandemics , COVID-19/epidemiology , China/epidemiology , Humans , Steel , UncertaintyABSTRACT
This paper deals with the analysis of the evolution of international trade after COVID-19, examining commodity prices, the shipping industry, and the influence of the cost of bunker fuel. To this end, we use techniques based on fractional integration, fractional cointegration VAR (FCVAR) and wavelet analysis. Monthly data relating to heavy fuel oil prices and the shipping market from October 2011 to September 2021 are used. Using fractional integration in the post-break period, a lack of mean reversion is observed in all cases, which means that, for the commodity prices and shipping market indices, a change in trend will be permanent after COVID-19 unless strong measures are carried out by the authorities. Using wavelet analysis, we conclude that the demand shock represented in the indices mentioned above has led the price of fuel oil since the beginning of the pandemic, and bunker fuel is not relevant in determining the cost of maritime transport.
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The purpose of this paper is to study and reconsider the order of implementing temporary government regulation of commodity prices in the EAEU from the positions of quality and to develop recommendations for improving this order for the comprehensive fight against poverty and support for the middle class amid economic crises. This paper is based on the scientific provisions of the systems approach. The authors perform economic and mathematical modelling of the influence of implementing temporary government regulation of commodity prices on their quality in the EAEU based on the method of regression analysis. For the qualitative research of the practical experience of implementing temporary government regulation of commodity prices in the EAEU amid the COVID-19 pandemic, the method of case study is used. The scientific novelty of this paper consists in the fact that it is for the first time that the order of implementing temporary government regulation of commodity prices in the EAEU is treated from the positions of quality. The originality of this paper consists in the systemic view at the quality of life and the well-balanced consideration - during the determination of its level - of not only the inflation factor (price affordability of commodities) but also the factor of quality of commodities (level of satisfying population’s needs during consumption of goods) © 2022. International Journal for Quality Research.All Rights Reserved.
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Purpose>This paper aims to examine the impact of health and other exogenous shocks on stock markets in Africa. Particularly, the authors examined the resilience of the major stock markets in 12 African economies during the recent global pandemic.Design/methodology/approach>This paper uses the recent panel vector autoregressive model, which enables us to capture the response of stock markets to shocks in COVID-19, commodity markets and exchange rate. For robustness, the authors also analysed the panel Granger causality test. Data was obtained for the period ranging from 2 January 2020 to 31 December 2020.Findings>The results show that the growth in COVID-19 cases and deaths do not have any substantial impact on the stock market returns of these economies. In terms of commodity markets, the authors find that gold price has a negative contemporaneous effect on stock returns, but the effect fizzles out around the fifth day while crude oil price, on the other hand, has a significant positive simult aneous impact on stock returns and also converges around the fifth day. The authors further find that the exchange rate has a contemporaneous and nonlinear effect on stock returns and seems to be more dramatic when compared with the other variables. Overall, the results show that stock markets in Africa appear to be flexible and resilient against the COVID-19 outbreak but are affected by other exogenous shocks such as volatile commodity prices and the foreign exchange market. The effect is, however, short-lived – between one to five days.Practical implications>Following the study’s findings, policies should be put in place to support financial markets by way of hedging against commodity instability and securing domestic currency financing. Policymakers are also recommended to concentrate on managing the uncertainties around their exchange rate markets and develop robust and efficient domestic financial markets to encourage local and foreign investors.Originality/value>Several studies have been carried out on the effects of disasters (such as the COVID-19 pandemic) on stock markets, but only a few studies have examined the resilience of stock markets to health and other exogenous shocks. This study’s attempt is not only to examine the impact of COVID-19 health shocks on stock markets but also to analyse the resilience of the sampled stock markets. The authors also analyse the resilience of stock markets to commodity markets and exchange rates shocks.
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We examine the information transfer dynamics between global commodity and African equity markets to test their efficiency levels in a denoised transfer entropy approach. Our findings in the short- and medium-term scales lend support to the alternative hypothesis of market efficiency, whereas the transfer entropies at the long-term scale lend support to the efficient market hypothesis and the long-term market efficiency. Investing in a single commodity results in high uncertainty when the return pattern (history) of African equities is acknowledged. Similarly, investing in any single African equity results in high return uncertainty whilst accounting for the history of commodity markets’ returns. Short-term traders could monitor the loopholes in the market efficiency levels between global commodities and African equities to take advantage of arbitrage when needed, whilst long-term investors are assured of efficient market dynamics between global commodity markets and African equities. Regulation of markets may need to strategically incorporate news items as they fall due to either market.
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Purpose>This study aims to investigate the time-frequency comovement between wheat futures traded on three US markets (Chicago Board of Trade (CBOT), Kansas City Board of Trade (KCBOT) and Minneapolis Grain Exchange (MGE)) at different maturities and a global equity index.Design/methodology/approach>As they allow to trace transitional shifts over time and across different frequency bands, this paper relies on continuous wavelet tools to investigate the time-frequency comovement among wheat and global stock markets.Findings>The results show an increase in wheat futures prices at all maturities and a weak integration level within each wheat market during the subprime crisis. Moreover, the wavelet power spectra maps show high wheat and equity price volatility at different time scales and for various subperiods. Furthermore, the continuous wavelet coherence highlights time-frequency-varying comovements between the markets considered, which become particularly high during times of crisis.Practical implications>The results provide market participants with a better understanding of the nature as well as the magnitude of the relationship between the global financial market and different wheat markets at different maturities and during tranquil and crisis periods. Indeed, from investors' perspective it is important to understand how markets are segmented or integrated during tranquil and crisis periods in order to better assess risks, diversify portfolios and implement more effective hedging strategies. As for regulators, a better understanding of the level of integration of different markets would further help refine macroprudential policies, and thus strengthen financial stability and resilience.Originality/value>This paper enriches the existing literature by investigating the time-frequency comovement between wheat and a global equity market. Indeed, the dynamics between stock and wheat markets across different nearest to maturities have not been widely explored by previous studies.
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As the Russo–Ukrainian conflict obstructs the vast wheat production of Ukraine, we investigate the relationship over crises between geopolitical risk and prices of essential food commodities. We use multiresolution analysis to identify patterns concealed by high noise levels inherent with commodity prices during crises. Our sample includes such important periods as Brexit, COVID-19, and the current Russo–Ukrainian conflict. Results evidence a one-way causal relationship, with geopolitical factors significantly affecting food prices. Scholars interested in global development, as well as policy makers and international aid organizations will be especially interested in understanding the sensitivity of food prices to geopolitical risk.
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Motivated by increased agricultural commodity price volatility and surges during the past decade, we investigated whether financial speculation is to blame. The aim of this paper is to build on prior research about to what extent and in which ways financial speculation undermines agricultural commodity prices. In our analysis, we utilized the daily returns on milling wheat, corn, and soybean futures from the Euronext Commodities Paris market (MATIF) as well as the short-term speculation index. To quantify this impact, we apply Granger noncausality tests as well as the GARCH (generalized autoregressive conditional heteroskedasticity) technique. We also propose a model using seasonal dummy variables to examine whether financial speculation has a greater impact on price volatility during more volatile months. According to our results, financial speculation, as an external factor, in most cases has no effect or reduces the volatility of the underlying futures prices. The opposite is observed in the corn market, where volatility has risen in the post-2020 period and has been pushed up even more by speculation in April. However, since the influence on other commodities is limited or nonexistent, more emphasis should be focused on speculation in the European corn futures market or its interdependence with energy markets.
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This study examines the dynamic interaction between oil, natural gas, and prices with Indian economic policy uncertainty (EPU). The study finds that gold prices and industrial production are fundamental drivers of Indian economic policy uncertainty in both the short and long runs, using a dynamic autoregressive distributed lag (ARDL) model with monthly data ranging from January 2003 to July 2020. Gold prices are positively related to the Indian EPU, while industrial production is negatively related to it. Thus, investors in the Indian economy should use gold as a hedge for portfolio diversification and as a safe haven during an economic crisis. We also find a significant positive interconnection between gold prices and crude oil prices in both the short run and the long run, while the significant positive impact of natural gas prices on crude oil prices manifests only in the long run. The evidence also indicates that the EPUs of the US and Europe positively affect the Indian EPU, while the EPU of China does not have a significant effect. Higher crude oil prices are associated with higher gas prices, whereas higher gold prices are negatively associated with the natural gas price and vice versa. Furthermore, the evidence shows that the Indian EPU does not have a significant effect on the changes in the prices of goods.
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Energy and other related sectors are changing in China. This study attempted to estimate the energy product price volatility with energy efficiency during COVID-19 with the role of green fiscal policies. For this, we applied unit-root tests, ADCC-GARCH, and CO-GARCH techniques to infer the study findings. The results showed that energy price volatility was significantly connected until 2018. More so, the green fiscal policies were significantly connected between energy product price volatility and energy efficiency during COVID-19 (2019-2020). From energy products, the crude oil price volatility was significant at 16.4%, heating oil volatility was significant at 18.2%, natural oil price volatility was 9.7%, gasoline price volatility was 28.7%, and diesel price volatility was 34.1% significant with energy efficiency, due to the intervening role of green fiscal policies. The findings of this study are robust in comparison to previous studies. Multiple stakeholders can take guidelines from the findings of the recent study. As per our best understanding and knowledge, if suggested recommendations are implemented effectively, these results will help to enhance energy efficiency through green fiscal policies in the post-COVID period.
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Purpose>This paper aims to examine the frequency of co-movements and asymmetric dependencies between bitcoin (BTC), gold, Brent crude oil and the US economic policy uncertainty (EPU) index.Design/methodology/approach>The authors use a wavelet approach and a quantile-on-quantile regression (QQR) method.Findings>The results show a positive interdependence between BTC and commodity price returns at both medium and low frequencies over the sample period. In contrast, the dependence is negative between BTC and EPU index at both medium and low frequencies. Furthermore, the co-movements between markets are more pronounced during crises. The results show that strategic commodities and EPU index have the ability to predict BTC price returns at both medium- and long-terms. The QQR method reveals that higher gold returns tend to predict higher/lower BTC returns when the market is in a bullish/bearish state. Moreover, lower gold returns tend to predict lower (higher) BTC returns when the market is in a bearish (bullish) state (positive (negative) relationship). The lower Brent returns tend to predict higher/lower BTC returns when the market is in a bullish/bearish state. High Brent quantiles tend to predict the lower BTC returns in its extremely bearish states. Finally, higher and lower EPU changes tend to predict lower and higher BTC returns when the market is in a bearish/bullish state (negative relationship).Originality/value>There is generally a lack of understanding of the linkages between BTC, gold, oil and uncertainty index across multiple frequencies. This is, as far as the authors know, the first attempt to apply both the wavelet approach and a QQR method to examine the multiscale linkages among markets under study. The findings should encourage the relevant policymakers to consider these co-movements which vary over time and in duration when setting up regulations that deem to enhance the market efficiency.
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Domestic and international mobility restrictions helped to reduce the numbers of confirmed Covid-19 cases until the end of 2021. Indonesia entered 2022 with caution, however, as Omicron cases began to rise. Recent success in managing the pandemic has coincided with what might be the start of an economic recovery, in no small part driven by high commodity prices—mainly for coal and palm oil—improving the fiscal and trade balances. The new tax harmonisation law is intended to lower the fiscal deficit to less than 3% of GDP by 2023, and a carbon tax will be implemented in April 2022—starting with a cap-and-tax scheme for coal power plants, before more sectors are included. Agriculture has played a key role in helping Indonesia to weather the pandemic, with the sector’s growth supporting employment and food consumption during the crisis. A resurgence in the palm oil price, together with rising agricultural wages and a narrowing of the labour productivity gap, has helped the agriculture sector lead the recovery, but concerns remain over the sector’s environmental footprint. Against recent food and environmental policy commitments, a renewed focus on increasing on-farm yields is a critical area for policy. We conclude with some reflections on the national palm oil replanting program and how better benefits might be delivered for smallholders and the environment.