Impact of COVID-19 Induced Lockdown on Wheat Prices: Empirical Evidence from Interrupted Time Series Analysis

Abstract

COVID-19 incidence disrupted the food markets in India. The present study, adopting the interrupted time series analysis (ITSA), captures the impact of pandemic induced lockdown on wholesale and retail wheat prices. Prices increased post-lockdown, however, there was no evidence of structural break as well as persisting volatility implying that the lockdown had no lasting impact on wheat prices. Retail prices witnessed an immediate increase post-lockdown across the country but significant only in west and north-east zones, and showed a decline in north and east zone. On the contrary, wholesale prices witnessed an immediate and significant increase in west and north-east zones; with a significant decrease in south zone. A negative post intervention trend in ITSA confirmed the result as a majority of the market zones reverted back to pre-lockdown levels which shall be attributed to the wheat arrivals post bumper harvest. Despite the relaxation allowed for agricultural related activities during the lockdown, price change in wheat has been observed across regions but reverted back owing to the system resilience. The findings affirm that market disruption is the main driver behind the observed price changes and government interventions like staggered procurement and logistics support resulted in wheat sector restoration