The Middle East plays a limited direct role in agricultural production and trade, but conflict in the region has a significant effect on global agriculture. This is because agriculture is energy intensive and closely linked to energy markets through biofuel production. Using the OECD–FAO Aglink-Cosimo model, this study analyses two transmission channels of an oil price shock to global agricultural prices: fertiliser markets and biofuel demand. Results show delayed and moderate increases in agricultural commodity prices, with the strongest impacts in countries highly dependent on imported fertilisers. Temporary increases in biofuel mandates have limited effects on food prices but may increase risks for vegetable oils.
Forthcoming
The impact of the conflict in the Middle East on agricultural markets
Will be released on
