Description
FAO is analysing and providing updates on the emerging COVID-19 pandemic’s effects on agricultural markets—effects that are still largely unknown. Most current assessments generally foresee a contraction in both supply of and demand for agricultural products, and point to possible disruptions in trade and logistics. On the supply side, widely different views remain on the duration of the shocks, the price dynamics, differential impacts between domestic and international markets, differences across countries and commodities, the likely paths of recovery, and the policy actions to remedy the various shock waves. On the demand side, there is near ubiquitous agreement that agricultural demand and trade would slow-down, with contractions stemming from a deceleration in overall economic activity (GDP growth) and rising rates of unemployment. While food and agricultural systems are exposed to both demand and supply side shocks (symmetric), these shocks are not expected to take place in parallel (asynchronous) since, inter alia, consumers can draw on savings, food stocks and safety nets.