COVID-19 Outbreak: A sharp decline of 20% in the prices of agricultural commodities

The prevailing pandemic of Coronavirus, also known as COVID-19, is destroying the global economic system. The impact of the pandemic can be seen in many industries and businesses across the world. Amid all rumors about Coronavirus in India, the agriculture industry is also witnessing a major breakdown in the past few days. 

The prices of agricultural commodities including perishable vegetables, grapes, and sugar have seen a fall of 15-20% due to the dramatic decrease in the bulk demand from hotels and restaurants. Another possible reason for the fall in prices is the uncertainty over exports. Apart from this, the poultry sector has been hugely affected as the rumors of chicken spreading Coronavirus has caught fire. Stakeholders from other industries such as textile and poultry have are now approaching the government and are seeking loan restructuring and financial incentives to survive the tough time.

The problem of artificial shortages is also becoming a concern for the agriculture industry. Traders across the country are struggling to fight the rumors about the closure of the market, and hence, creating artificial shortages. 

Commenting on the outcry, Rajinder Sharma, former chairman of Azadpur Agricultural Produce Market Committee (APMC), said, “The demand for perishable goods has declined as bulk demand has stopped. However, there is more demand for vegetables that have a longer shelf life, such as onions, potatoes, and tomatoes. No shortage of fruits and vegetables in the market.” 

 It is important to consider that the demand for agricultural commodities has not been affected due to coronavirus either in India or in the international market, except for chicken. Even so, the farm-gate prices have reduced because of the scare of COVID-19. “The export price of grapes at the farm gate has fallen from about Rs 100 per kg to Rs 70-75 per kg. However, packaging and dispatches for exports have not decreased,” added Jagannath Khapre, president, All India Grape Exporters’ Association.

The havoc created by the rumors has made all the Industry associations appeal to the government for financial assistance and restructuring of bank loans. “Due to the awareness created by the government to fight against the coronavirus pandemic, the majority of workers are not reporting for work and migrant workers are also returning to their native places. This situation is likely to intensify and result in mass stoppage of production,” said Ashwin Chandran, chairman, Southern India Mills Association.