Factors affecting food inflation in Turkey

Food price movements are one of the most discussed topics in our country recently. Because food products are the first in human need hierarch and the sub_group with the most heavuness in CPI. Therefore, rising food price affect the income distribution and welfare level of households. İn addition, it is important in terms of fighting inflation because it is seven as the determinant of inflation. As a result, it is important ti determine the factors affecting food inflation because food inflation iş botu a social and economic problem. On these pounts, it was investigated what are the factors affecting food inflation in the Turkish economy in this thesis study. İn the study,two models were used as agriculture and foreign market balance. The 2010:1-2019:12 period was used as the time inteeval in the analysis. Toda Yamamoto test was used for product market balance in the investigation of causality relationship, while Granger test was used for external market model. As a result of the causality tests applied, a two-way relationship between food inflation and the exchange rate was found. Food inflation from motorin prices has an accurate statistically significant relationship. In addition, a causality relationship has been found from food inflation to food imports. The relationship of cointegration in established models was investigated with Johansen and ARDL Boundary test approaches. As a result of the Johansen cointegration test, a long-term equilibrium relationship has been reached between foreign market balance variables and food inflation. According to the normalized cointegration vector estimation results, it has been determined that there is a positive and statistically significant relationship between food import and exchange rate and food inflation in the long run. As a result, policies such as reducing input costs, supporting and developing agricultural production, reducing import dependence, cooperativization and reducing intermediaries should be developed.