Urban Food Markets and the Lockdown in India

Abstract

On March 24, 2020, the Government of India announced a 21-day national lockdown that has since been extended to May 3, 2020. The lockdown has left urban food markets in disarray with severe supply bottlenecks and restrictions on doing business. At a time when food prices in India were declining consistently, supply disruptions consequent to the lockdown have reversed the trend. Based on an analysis of publicly available data on wholesale and retail prices for 22 commodities from 114 Centres, we find that prices have increased since the lockdown and show no signs of reverting to the pre-lockdown levels as of April 21, 2020. Average price increases are to the tune of over 6% for several pulses, over 3.5% for most edible oils, 15% for potato 28% for tomato in the 28 days post-lockdown compared to prices during the month preceding the lockdown. We also find that smaller cities have seen a much higher increase in prices with at least a few cities seeing a rise in retail food prices by as much as 20%. A survey of 50 food retailers in 14 cities reveal serious operational challenges associated with sourcing supplies, transportation and police harassment. At the same time, several innovative arrangements have evolved as well. The paper reviews these briefly and outlines some policy concerns.