Having in mind that the share of ethanol as biofuel has increased in recent decades, concern about the impacts of its prices on agricultural commodity prices has gained relevance. These concerns are due to the fact that the energy and environmental benefits derived from the use of biofuels can occur at the expense of the impact of agricultural commodity prices. This is because most of the raw materials currently used to produce biofuels, such as corn in the US, sugarcane in Brazil and oilseeds in Europe, are also important commodities globally. When it comes to ethanol, it could not only influence the price level of these agricultural commodities but may also affect the volatility of these prices. Price volatility reflects the volatility of current and expected future values of production, consumption, and inventory demand. With the recognition that there are other measures of volatility associated with consumption, production or stocks, in this study, the focus is on price series and the main objective is to use numerical modeling and numerical simulation tools in the fractional scope in order to analyze the relationship between the behavior of ethanol price dynamics and the price dynamics of some agricultural commodities, such as corn, sugar and soybean. It is hoped that the results may contribute to the clarification of price relationships between ethanol and such commodities, thus allowing agents in these markets to be clearer in making decisions that involve hedging, risk exposure and investment incentives.
News published in Agência FAPESP Newsletter about the scholarship: