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Impacts of the COVID-19 Pandemic on the Global Agricultural Markets

Christian Elleby, Ignacio Perez Dominguez (), Marcel Adenauer and Giampiero Genovese
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Marcel Adenauer: OECD
Giampiero Genovese: European Commission, Joint Research Centre

Environmental & Resource Economics, 2020, vol. 76, issue 4, No 30, 1067-1079

Abstract: 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 COVID-19 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; Aglink-Cosimo (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s10640-020-00473-6

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