Impacts of the COVID-19 Pandemic on the Global Agricultural Markets
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Impacts of the COVID‑19 Pandemic on the Global Agricultural Markets Christian Elleby1 · Ignacio Pérez Domínguez1 · Marcel Adenauer2 · Giampiero Genovese1 Accepted: 10 July 2020 © The Author(s) 2020
Abstract This paper analyses the impacts on global agricultural markets of the demand shock caused by the COVID-19 pandemic and the first wave of lockdown measures imposed by the governments in the first semester of 2020 to contain it. Specifically, we perform a scenario-based analysis on the IMF economic growth forecasts for 2020 and 2021 using a global multi-commodity agricultural market model. According to our results, the sharp decline in economic growth causes a decrease in international meat prices by 7–18% in 2020 and dairy products by 4–7% compared to a business as usual situation. Following the slowdown of the economy, biofuel prices fall strongly in 2020, followed by their main feedstocks, maize and oilseeds. Although the income losses and local supply chain disruptions associated with the pandemic undoubtedly has led to an increase in food insecurity in many developing countries, global food consumption is largely unaffected due to the inelastic demand of most agricultural commodities and the short duration of the shock. From an environmental viewpoint, the COVID19 impacts point to a modest reduction of direct greenhouse gases from agriculture of about 1% or 50 million tonnes of carbon dioxide equivalents in 2020 and 2021. Keywords COVID-19 · GDP shock · Agricultural markets · Biofuel markets · AglinkCosimo
1 Introduction The COVID-19 pandemic, which has led to the loss of more than 500 thousand lives out of 10.3 million confirmed cases (as of June 30, 2020), has also caused a global downturn comparable, by some measures, to that of the great depression in the 1930s. The causes of
The opinions expressed and arguments employed herein are those of the authors and do not necessarily reflect the official views of the European Commission, the OECD or of its member countries. * Christian Elleby [email protected] 1
European Commission, Joint Research Centre, Seville, Spain
2
Agro‑Food Trade and Markets Division, OECD, Paris, France
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the two economic crises are, however, very different and it is also believed that the recovery from the current crisis will be faster than the recovery from the great depression. There is still a lot of uncertainty though, as to how long the COVID-19 recession will last and what the global economic consequences will be in the medium term. It depends on a number of factors affecting supply and demand of all good including agricultural commodities. These include, how quickly businesses around the world will be able to reopen from the lockdowns; whether there will be secondary waves forcing governments to impose new lockdown measures; how soon a vaccine and/or an effective treatment against the SARS-CoV-2 virus is available and how all this affect consumer spending patterns. Nonetheless, there are already several global econ
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