Here Today, Gone Tomorrow: COVID-19 and Supply Chain Disruption

By Kanika Mahajan & Shekhar Tomar | 11 May 2020 Topics : Covid-19, Food, Online Data, Prices, Supply Chain Disruptions


This paper looks at the disruption in food supply chains due to COVID-19 induced economic shutdown in India. We use a novel dataset from one of the largest online grocery retailers to look at the impact on product stock-outs and prices. We find that product availability falls by 10 percent for vegetables, fruits, and edible oils, while there is a minimal impact on their prices. On the farm-gate side, it is matched by a 20 percent fall in quantity arrivals of vegetables and fruits. We then show that supply chain disruption is the main driver behind this fall. We compute the distance to production zones from our retail centers and find that the fall in product availability and quantity arrivals is larger for items that are cultivated or manufactured farther from the retail centers. Our results show that long-distance food supply chains have been hit the hardest during the current pandemic with welfare consequences for urban consumers and farmers.

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