Hello All !!!!
As many of the farmers are contacting me by asking what about the prices of agricultural commodities in the future?? some of the farmers having the storage of Maize, cotton, and Arecanut. Now they are selling at a lower rate in fear of future prices.
if anybody has an idea about what may be the forecast of the price trend after the opening of a lockdown or later. Simple answer chances of Increase or decrease will be helpful for me to guide them.
any scientific prediction will be highly appreciable.
It is hard to tell now. While it is certain COVID-19 might cause a recession, I think some sectors may experience a windfall gain. Unless someone has data!
The lack of workers for harvest in Europe or the United States must be taken into account
Purely unpredictable
It all depends on the demand of the particular commodity
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Most agricultural commodities being perishable in nature, farmers cannot hold stocking them for long, unless they have the capacities to hold the stocks in anticipation of better prices in future. Though interventions are made by the national and provincial governments in India to control the soaring prices of vegetables and other agricultural commodities, these regulations are seemingly less effective in containing the price rise in the wake of the Covid-19 pandemic. Now, the question, 'whether prices would decline or improve in the post lock-down context, is difficult to predict'. Situation appears to be complex even now when prices of commodities behave in funny ways depending on market demand and supply conditions. For instance, in Kerala (a South Indian province), there was a tragic instance of small dairy farmers throwing volumes of their milk collections into the natural drains simply because of the reason that there were no buyers for the milk in the context of lock-down. How do we explain this paradox?
Demand side of the problem is rather predictable: Demand would slightly increase, not because we need more wheat but rather we need more because of Covid and related speculation behaviour. Tough part is supply part. Here, we should predict weather, current stock levels available to the market and future stocks available to market. I refer to ''stocks available'' to the market. Yes, there are and there would be stocks but they are not the stocks for the market but rather stocks for the future. Hence, there would be a speculative market behaviour, at least for one year. The result: theoretical models in finance shows that speculation can lead to overpricing and price bubbles. I expect a lot of overpriced commodities in the next 12 months.
the effect is to increase them resellers as large supermarket chains take advantage of any situation to make profits are birds of prey
Small farmers are least fluctuated by these price fluctuation, however, after the lock down the price value may jump to slightly higher zone, which may help the farmer to fetch good amount.
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