While the global economic shock of the COVID-19 pandemic has driven most commodity prices down and is expected to result in substantially lower prices over 2020, prices for agricultural commodities are broadly stable, the World Bank states in its Commodity Markets Outlook published in April 2020.
Despite only moderate impact of the COVID-19 crises on the outlook for most agricultural commodities, supply chain disruptions and government steps to restrict exports or stockpile commodities raise concerns that food security may be at risk in places, the report says.
Energy and metals commodities are the most affected by the sudden stop to economic activity and the serious global slowdown that is anticipated. Commodities associated with transportation, including oil, have experienced the steepest declines.
Agriculture prices are less tied to economic growth, and saw only minor declines in the first quarter of 2020, except for rubber, which is used in transportation. Prices are expected to remain broadly stable in 2020 overall because production levels and stocks of most staple foods are at record highs.
However, agricultural commodity production could face disruptions to the trade and distribution of inputs such as fertilizer, pesticides, and labour availability. Disruptions of supply chains have already affected emerging market and developing country exports of perishable products such as flowers, fruits, and vegetables.
The fact that global markets are well-supplied and that prices have been broadly stable does not imply food availability everywhere, the authors point out. The Desert Locust outbreak (Rural 21 reported), with its epicentre in East Africa, has so far affected 23 countries. According to recent World Bank estimates, locust-related losses could reach USD 8.5 billion by the end of 2020 if control measures are not undertaken. Countries expected to suffer most are Ethiopia, Kenya, and Sudan.
Read more at World Bank website