COVID-19 impact on wheat market in Bulgaria and Black Sea Region
Doriana Milenkova
Abstract: The effects of 2020 COVID-19 pandemic over the social and economic life throughout the globe have no comparison with any other phenomenon of our modern history. Economic activity has been substantially suppressed and even halted across geographical regions and various sectors like transport, tourism, HoReCa, automotive and others. These effects were additionally influenced by authorities’ measures for closure of borders and imposing export restrictions.
The pandemic disrupted the food supply chains and affected the food prices. Market analysts reported that the prices of wheat and rice went up, but corn lost market due to less demand for biofuels. There was an urge for stockpiling grains, trade flows reshuffles, and over-purchasing of flour and pasta products. Undoubtedly, the COVID-19 pandemic changed the market dynamics.
The goal of this research is to assess the impact of COVID-19 on grain markets as the most sensitive and dynamic food markets. This paper will focus on the impact of COVID-19 on the wheat prices in Bulgaria and the Black Sea Region markets, making use of using Dickey Fuller Test for price stationary and comparing the period of the first outbreak (March–May 2020) with the same period of the previous year. In addition, the standard deviation in price is calculated to compare the price volatility in the period of the pandemic with the same period in 2019.
The main hypothesis is that COVID-19 had significant impact on wheat prices in the reviewed markets with different magnitude in terms of price volatility. In addition, the exceptional circumstances have affected the volumes and regularity of exports of wheat from theexplored regions.
The pandemic disrupted the food supply chains and affected the food prices. Market analysts reported that the prices of wheat and rice went up, but corn lost market due to less demand for biofuels. There was an urge for stockpiling grains, trade flows reshuffles, and over-purchasing of flour and pasta products. Undoubtedly, the COVID-19 pandemic changed the market dynamics.
The goal of this research is to assess the impact of COVID-19 on grain markets as the most sensitive and dynamic food markets. This paper will focus on the impact of COVID-19 on the wheat prices in Bulgaria and the Black Sea Region markets, making use of using Dickey Fuller Test for price stationary and comparing the period of the first outbreak (March–May 2020) with the same period of the previous year. In addition, the standard deviation in price is calculated to compare the price volatility in the period of the pandemic with the same period in 2019.
The main hypothesis is that COVID-19 had significant impact on wheat prices in the reviewed markets with different magnitude in terms of price volatility. In addition, the exceptional circumstances have affected the volumes and regularity of exports of wheat from theexplored regions.
Keywords: Black Sea; Bulgaria; COVID-19; market; price effects; trade; wheat
Date published: 2021-01-04
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