Unraveling Turkish agricultural market challenges: Consequences of COVID-19, Russia–Ukraine conflict, and energy market dynamics

Abstract

For a significant global segment, the volatility in grain prices presents a substantial menace to food accessibility and security. In the global pandemic and the Russia–Ukraine conflict (RUW), numerous nations were caught off guard, exacerbating this predicament and leading to instances where citizens faced purchasing restrictions on sunflower oil. This study employs the VAR (1)-Asymmetric BEKK-Generalized Autoregressive Conditional Heteroscedasticity (GARCH) (1,1) model to assess the extent of risks stemming from the pandemic and RUW in critical Turkish agricultural commodity markets: namely, wheat, barley, corn, and sunflower oil. The analysis reveals that the conditional variances of their return series are positively influenced by short- and long-term uncertainties. With the escalations in the global oil market, the enduring hazards within these selected markets in Türkiye have intensified concurrently. The COVID-19 pandemic has induced a decrease in long-term uncertainty within wheat and barley markets, wherein noteworthy spillover risks in the barley, corn, and sunflower oil markets have exacerbated risks in the corn market. Empirical findings imply that COVID-19 and RUW disrupt the agricultural supply chain, leading to impediments in food provisioning and security. The outcomes provide valuable insights to fortify policies, guarantee consistent access to plant-based protein, and address nutritional insecurity within the nation. These policy measures align with the initiatives undertaken by the United Nations and Türkiye, which actively engage in establishing a grain corridor to facilitate Ukraine's grain exports, thereby ensuring food security and safeguarding agricultural lands. [EconLit Citations: A1, E3, G1, Q0, Q1, Q2, Q4].