The price volatility of staple food in the global market as an impact of COVID-19 pandemic and world economic recession

Abstract

Most of the food commodity prices on the world market increased drastically in late 2006 to mid 2008. The increase in food prices in 2008 was triggered by the global crisis. In 2020, the world is facing a global recession caused by the Covid-19 pandemic. This study aims to examine the impact of the global recession on the prices of several food commodities in the global market. Volatility analysis was conducted to determine the movement of food commodity prices during the crisis and recession. Secondary data obtained from the World Bank's Pink Sheet Data were used in this study. The form of the data is a monthly time series from January 1960 to December 2020. The volatility analysis is estimated using ARIMA (Autoregressive Integrated Moving Average) model and ARCH-GARCH (Autoregressive Conditional Heteroscedasticity-Generalized Autoregressive Conditional Heteroscedasticity) model. The results showed that most food commodity prices had high volatility during the 1973 crisis and 2008 crisis. However, food prices were not too affected by the 2020 global recession.