The impacts of COVID-19 on trade in food and agriculture – a first assessment

Abstract:

This paper offers a first assessment of the impacts of COVID-19 on trade in food and agricultural products. It is based on monthly trade data for more than 100 reporting countries, covering 91% of global agricultural. Impacts are assessed against a normalized baseline (counterfactual) of monthly trade flows for the past 5 years for overall trade volumes as well as for trends across countries and commodities. The assessment covers three major categories of indicators. The first entails changes in overall trade volumes and values, focusing on food import bills (FIB) and export earnings (EE). The set of indicators proposed will also include a variance decomposition of the changes in FIBs and EEs, disaggregating them into effects arising from in quantities traded, prices in US dollars and changes in exchange rates. The second indicator category analyses prices of imports and exports and the resulting changes in aggregate terms of trade. It also features a CIF/FOB ratio calculated across pairs of trading countries to assess possible changes in aggregate transportation and insurance costs or disruptions in supply chains. The CIF/FOB ratio is measured as the total variation distance between any pair of countries across all traded agricultural products. The third and final category gauges the exposure of countries across commodities and trading partners. Indicators range from simple concentration rates (CRn) to normalized Herfindahl-Hirschman indices to generalised entropy measures. Based on annual data, the paper finally offers some aggregate indicators such as changes in import dependency rates, export orientation measures and food self-sufficiency.