Impacts of the COVID-19 pandemic on food prices: Evidence from storable and perishable commodities in India

Abstract

The supply chain disruptions caused by the COVID-19 outbreak have led to changes in food prices globally. The impact of COVID-19 on the price of essential and perishable food items in developing and emerging economies has been lacking. Using a recent phone survey by the World Bank, this study examines the impact of the COVID-19 pandemic on the prices of the three essential food items in India. The results indicate that price of basic food items such as atta (wheat flour) and rice increased significantly during the pandemic compared to the pre-pandemic period. In contrast, during the same period, the price of onions declined significantly. The findings may suggest panic-buying, hoarding, and storability of food items. The results further reveal that remittance income and cash transfers from the government negatively affected commodity prices. Thus, this study's findings suggest that families may have shifted the demand away from essential foods during the pandemic.

Fig 1. Food price indices in India versus world.

Source: FAOSTAT (2021), available at http://www.fao.org/faostat/en/.

Fig 2. Differences in essential food prices in India (before and during the lockdown in 2020).

Source: Authors’ computation from the high-frequency phone surveys on COVID-19 in India.