English abstract
The Sultanate of Oman has for a long time been reliant on the international markets for the supply of its food requirements, ensuring that its food security is based on trade. The country is highly dependent on food imports, which leaves it vulnerable to supply chain disruptions and volatility in global markets. Recent food crises and pandemics such as COVID-19 and the Russian-Ukraine war have brought to light the threat of food shortages and high import prices. As a result, understanding how prices are transmitted in food markets is important to all parties involved in the food supply chain, which policymakers should consider. With implications for Oman's food security, this study aims to explore the co-movement dynamics and lead and lag relationships between food commodities markets in a time-frequency domain. A wavelet analysis will be used to detect the dynamic relationship between global and local food prices using monthly data from January 2013 to January 2024. The primary objective of this study is to investigate whether global food prices and Omani food prices are causally related and whether this relationship is similar across the food sub-groups that form the food price index as well. The results showed that Omani food prices have a significant correlation with world food prices, specifically after 2020, in both short-term and long-term periods. Among food commodities, the findings revealed that local cereal prices demonstrated strong coherence with world cereal prices throughout the period, primarily long-term, but extending into the short term after 2020. In addition, a lead-lag relationship was found between world cereal prices and Omani cereal prices as well as between world vegetable oil prices over Omani edible oil prices.
