Market Interactions Between Agricultural Commodities and the Dry Bulk Shipping Market

Michail, N. A., & Melas, K.D. Market interactions between agricultural commodities and the dry bulkshipping market. The Asian Journal of Shipping and Logistics (2020), https://doi.org/10.1016/j.ajsl.2020.07.003

9 Pages Posted: 14 Dec 2020

See all articles by Nektarios Michail

Nektarios Michail

Cyprus University of Technology

Konstantinos D. Melas

Metropolitan College, Greece - Faculty of Business and Economics

Date Written: 2020

Abstract

We investigate and quantify the relationship between agricultural commodities and ocean-going freight rates, using a weekly dataset from 2010 to 2019 and a Vector Error Correction Methodology. The results are firstly supportive of the view that vessel classes are highly interconnected, and secondly confirm that commodity prices can have a strong impact on freight rates across most vessel classes. For commodities in which no impact is registered on freight rates, the possibility of substitution effects exists. Furthermore, the results indicate that the markets in which these products trade can be a significant determinant of future freight rate movements. These findings can be particularly useful for agricultural businesses that are concerned with the transportation cost of their products and the ways that the latter can be mitigated.

Keywords: agricultural commodities, dry bulk, shipping freight rates, cointegration, variance decomposition

JEL Classification: G11, G12, G13, G20

Suggested Citation

Michail, Nektarios and Melas, Konstantinos, Market Interactions Between Agricultural Commodities and the Dry Bulk Shipping Market (2020). Michail, N. A., & Melas, K.D. Market interactions between agricultural commodities and the dry bulkshipping market. The Asian Journal of Shipping and Logistics (2020), https://doi.org/10.1016/j.ajsl.2020.07.003, Available at SSRN: https://ssrn.com/abstract=3581518

Nektarios Michail

Cyprus University of Technology ( email )

Limassol, 3603
Cyprus

Konstantinos Melas (Contact Author)

Metropolitan College, Greece - Faculty of Business and Economics ( email )

74, Sorou St.
Maroussi, 15125
Greece

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
12
Abstract Views
125
PlumX Metrics