EFFECTS OF THE PANDEMIC ON THE AGRICULTURAL MARKETS WORLDWIDE

Abstract

The global spread of the coronavirus pandemic (COVID-19) worldwide since the beginning of 2020 and the measures introduced to curb it have been reflected in a significant decline in global economic activity, which was most pronounced in the second quarter of the year. The decline in real GDP on a chain basis in the second quarter was observed simultaneously in all geographical regions, and its depth is unprecedented for the period after World War II (-11.8% in the euro area, -9.1% in the US and -7.9% in Japan). In response to these developments, economic policy in all affected countries has been geared towards strong relief and the adoption of major fiscal and monetary incentives.

The behavior of governments and central banks influenced the price dynamics of the main asset classes. Unprecedented volume of incentives led to further detachment of market dynamics from economic development. The initial drop in prices was caused by high uncertainty, but was quickly offset by major indices of the abundant liquidity of large-scale stimuli that were not well targeted.

Within one week (March 9-13) huge, for some asset classes historically, declines in the range of 40 to over 55% of their value were realized. Terms such as "lockdown" and "new normality" have appeared. Different asset classes differently "suffered" the development of panic related to the helplessness of states to adequately respond quickly to the development of the pandemic.