The Impact of the Covid-19 Pandemic Determinants on Selected Agricultural Commodity Prices

Abstract

The global Covid-19 pandemic is the most notable event that has been affecting our lives since the end of 2019. The ongoing pandemic influenced many sectors, including agriculture and commodity markets. The evolution of selected agricultural commodity prices during the global pandemic of Covid19 is investigated in this paper. The major goal is to determine if the Covid-19 indicators affect the price movements of cocoa, corn, sugar, and wheat. Using the ARDL model, we examined the daily prices of chosen commodities from January 23, 2020, to November 30, 2021. Our results show that the price of corn and wheat was not statistically significantly affected by the Covid-19 pandemic determinants. On the other hand, in the case of cocoa, we observed a negative indirect effect of financial volatility in the long run. Furthermore, in the short-run cocoa prices were negatively influenced by the financial volatility index as well as new daily Covid-19 cases. Besides, sugar prices were affected by the increase in the new confirmed Covid-19 cases and death in the long run. We also found an indirect negative impact of the financial volatility on the sugar prices in the short and long run. Moreover, sugar prices were in the short-run heavily affected by its previous developments as well as by the Covid19 media coverage index.