|Fish|15.1|27.0|47.9|16.2|29.0|51.6|
|---|---|---|---|---|---|---|
|Fresh Fruits - Vegetables|1.7|2.4|4.5|27.8|38.7|71.0|
|Legumes and pulses|7.8|14.2|24.9|2.6|5.1|8.9|
|Meat|2.7|4.5|7.9|16.9|29.5|50.6|
|Nuts and derived products|3.0|5.0|9.0|6.7|11.3|20.1|
|Oil-bearing|1.2|2.6|4.6|5.5|11.1|19.8|
|Stimulant crops|1.2|2.7|4.9|0.7|1.6|3.0|
|Sugar|2.5|5.3|9.6|2.6|5.4|9.7|
|Vegetable and animal oils<br>|1.8<br>|3.0<br>|5.2<br>|11.5<br>|18.6|34.4|
|**Food**<br>|4.0<br>|7.4<br>|12.9<br>|12.9<br>|22.0|39.1|

<mark>Vegetable and animal oils 1.8 3.0 5.2 11.5 18.6 34.4</mark> **<mark>Food</mark>** <mark>4.0 7.4 12.9 12.9 22.0 39.1</mark> Note: The formula used to compute the changes in prices is: d i =<sup>∆QQppccddIIppIIQQii</sup> �E . Where i is the importer and k is the product. Direct price effects are calculated at the country-product level using HS4 digit product elasticities from Fontagné, Guimbar and DDppIId II PPIIppd dde II ii Orefice (2019) and Kee and Nicita (2020) and are assumed to be constant. For each product-group, results are aggregated using the share of ccI ppddppIIQQ country-products imports of global imports as weights.

The initial shock of Covid-19 and containment policies on the food export supply in the previous section has been informed by the early data for Chinese exports in 2020 (Section 3). These data indicate a decline in food exports in January and February 2020 year on year of 17 percent. While this is a logical first scenario, there is significant uncertainty on the size of the Covid-19 shock. On the one hand, there are reasons to believe that the shock could be larger for other countries as the health crisis now affects a large fraction of the world economy simultaneously. First, the more global nature of the shock could imply that supply effects through food value chains could be larger, for instance as key imported inputs could be delayed or foreign seasonal workers could be denied entry. Second, the global nature of the shock could also drive a larger number of firms into financial problems or bankruptcy. Both may lead to larger effects on food supply (upward scenario). On the other hand, a downward scenario where the initial shock could be smaller than the baseline is also possible. This could be the case if the disruptions in production across countries are staggered over time, thus mitigating the effect on the global export supply. As a second sensitivity test, we therefore consider upward and downward scenarios where we assume that the initial supply shock across all products is respectively 10 percent higher and 10 percent lower, compared to the baseline.<sup>18</sup> The results for this sensitivity exercise are reported in Table 5. We present the initial shock to the global export supply of food due to Covid-19 and the impact on export supply as governments impose restrictions (columns 1 to 3). The overall decrease in food export supply in the short term (i.e. over the quarter following the outbreak of the pandemic) ranges between 5.7 and 19.7 percent in the downward and upward scenarios respectively. Under escalating trade restrictions, the world food export supply would decline by 21 percent (downward scenario) and 55.4 percent (upward scenario). On a yearly basis, the total decrease in the global export supply of food ranges between 5.2 percent (downward scenario) and 13.8 percent (upward scenario).<sup>19</sup> These results suggest that the potential decrease in food export supply due to Covid-19 and uncooperative trade policy actions could be similar in magnitude to the 11 percent drop experienced during the 2008-2009 food crisis.

Columns 4 to 6 show the corresponding effects on world food prices. In the downward scenario, food prices would increase less than 2 percent as a result of Covid-19. Uncooperative trade policy could still increase prices by up to 6.6 percent. A larger initial Covid-19 shock on export supply would lead to higher

> 18 Specifically, for the upward and downward scenarios, we shift the distribution of the shock to different products up or down by 10 percent, respectively.

> 19 Under the assumption that the Covid-19 shock is temporary (i.e. the world export supply of food contracts only during 3 months after the pandemic takes place and then goes back to normal) and that trade flows are proportional across quarters, export supply under uncooperative trade policies would decrease by 5.25 (21/4) percent in the downward scenario and by 13.8 (55.4/4) percent in the upward scenario on a yearly basis.

16