Wholesale and Retail Food Prices in Maharashtra during the COVID-19 Pandemic

The analysis builds on the extant literature in three ways: it covers the longest period of the lockdown; offers robust comparisons of means and variances of food commodities’ prices and the price wedge between them in different cities/market centres in Maharashtra during the lockdown relative to the pre-pandemic period; and finally gives a distillation of time-series analysis of co-movements of wholesale and retail prices between pairs of centre/wholesale and retail prices, mutual dependence of wholesale and retail prices, taking their lags into account, and their time-varying volatility.

The authors are grateful to Rasha Omar for her guidance and support; Katsushi Imai and Raghbendra Jha for advice on the econometric analysis; and Shantanu Mathur and N Chandramohan for valuable discussions. The views expressed are personal and not necessarily of the International Fund for Agricultural Development which funded this study.

There had been a sudden surge in COVID-19 cases and fatalities in Maharashtra and elsewhere in September 2020.¹ Our focus is on the pandemic’s impact on food commodities’ wholesale and retail prices in Maharashtra covering four cities/market centres—Mumbai, Nagpur, Pune and Nashik. The food commodities comprise onion, potato, tomato, rice and milk. The period examined is 1 July 2019 to 30 June 2020 and is split into quarters.

Of all the food consumed in India, 92% is purchased. This illustrates the great importance of food supply chains (FSCs) for India’s food security (Reardon et al 2020). Essentially, all the food consumed in urban areas is purchased, since almost all urban households are net buyers of food. And, of the 40% of India’s food that is consumed in rural areas, 80% (in value terms) is purchased (while the rest is home-produced on own farms). Hence, COVID-19’s most important effect will be on national food security via its effects on the FSCs.