#COVIDByte #4: Impacts on Prices

Published April 28, 2020

We are pleased to present the fourth #COVIDByte, featuring a special report elaborated by members of our team regarding price changes along the value chains of apples and pears during the COVID-19 crisis

At CREDA-UPC-IRTA, we are eager to participate in the discussion about the impacts of the COVID-19 crisis in the food sector.

During these days in confinement, we have carried out an analysis of the consequences that this crisis may be having on the prices of apples and pears at the different stages of the value chain in Catalonia. It is very interesting to study price changes as an indicator of broader effects rippling through the economy and society, with apples and pears also serving as a proxy for other similar agricultural products.

The results indicate that, in general, during the COVID-19 crisis, the prices of apples and pears in Catalonia have tended to rise at all the stages of the value chain analyzed. However, it should be noted that these results do not necessarily establish a causal relationship between the evolution of prices and the crisis.

Within the value chain, Mercabarna’s retailers and wholesalers present the clearest indication of price differences between the period of the COVID-19 crisis and the previous period. We believe that the prices at central fruit distribution centers have not evolved in the same way due to the existence of prior agreements between them and the distribution chains. If the prices at the fruit centers were differentiated by customer (for example, sales prices to distribution chains and wholesale prices to Mercabarna), differences would be observed.

The analysis of the factors behind the evolution of the prices at each stage is necessary to identify the extent to which prices have changed due to the COVID-19 crisis. Among these factors, we found an increase in demand, decrease in supply, and increases in costs associated with the measures that companies have adopted to mitigate the spread of the virus. Although this factor analysis is beyond the objective of this publication, by analyzing the information published by Mercabarna, we have observed a strong increase in the sales of winter pears in this market during the months of March and April of 2020 in comparison to the same period of 2019. Specifically, an increase of 42.1% was observed, while in the months of January and February this relative increase was only 6.7%. In the case of the Golden delicious apple, the respective increase was more modest at 11.9%, while the variation in the months of January and February was 5.0%.

The full text of the report is available here (in Spanish): Precio Manzana y Pera_COVID19.pdf