Investigating the Impact of COVID-19 Outbreak on Canada's Commodity Market

18 Pages Posted: 2 Feb 2021 Last revised: 10 Feb 2021

See all articles by Achu Dobgima Destin

Achu Dobgima Destin

Cyprus International University - Institute of Graduate Studies and Research

Ben Bardis

Cyprus International University - Institute of Graduate Studies and Research

Date Written: January 29, 2021

Abstract

SARS-Cov-2 was first reported in Wuhan, a town in Hubei Province of China with a population of 11 million in December 2019, following an outbreak of non-pneumonia of a clear cause. The virus has now spread across the globe considerably more than 200 countries and territories, and the world health organization (WHO) described it as a pandemic on 11 March 2020. On the economic front, COVID-19 has led more than 200 countries partially or totally lockdown. This situation disrupted global supply chain, and induced a significant fall in both economic activity and financial asset prices. Canada, being one of the country affected by the Virus with 731 000 Cases, and 18 622 Deaths as at the 21 of January 2020. Recently vaccines have been developed but the contamination wave keeps on increasing every day. On the socioeconomic front, COVID-19 has led more than 200 countries into partial or total lockdown, disrupted global supply chains, and induced a fall in both economic activity and financial asset prices. It’s of prime importance to study how COVID-19 impact’s on Canada’s commodity market. The commercial and financial effect of COVID-19. The impact of COVID-19 is unclear because the public health crisis is still unfolding. There is limited amount of studies concerning this topic, because the crisis is still unfolding. The objective of this study is to investigate the impact of Covid-19 on Canada’s Commodity markets. The author uses extreme bound analysis for market interpretation and sourced data from Bank of Canada and Our World in Data COVID-19, from January 1 to December 31 2020. The result of the study show that, Total deaths per million have an impact on the monthly Bank of Canada’s commodity price index of energy because of the robust relationship between them. Furthermore, the result also show that, commodity price index of energy and total deaths per million are determinants to total commodity price index. Furthermore, commodity price index excluding energy, commodity price index of energy, commodity price index of minerals and metals, commodity price index of forestry and total deaths per million are robust determinants of monthly Bank of Canada total commodity Prices. M.BCNE, M.ENER, M.MTLS, M.MTLS, M.FOPR, M.FOPR, M.AGRI, M.FISH, TC, TD have a positive relationship with MBCPI. M.BCPI, M.BCNE, M.MTLS, M.AGRI and M.FISH.

Keywords: Commodity Prices, Price Index, Commodity Price Index of Forestry, Commodity Price index of fish, Metals and minerals

JEL Classification: D01, G01

Suggested Citation

destin, achu dobgima and Bardis, Ben, Investigating the Impact of COVID-19 Outbreak on Canada's Commodity Market (January 29, 2021). Available at SSRN: https://ssrn.com/abstract=3775259 or http://dx.doi.org/10.2139/ssrn.3775259

Achu dobgima Destin (Contact Author)

Cyprus International University - Institute of Graduate Studies and Research ( email )

Cyprus

Ben Bardis

Cyprus International University - Institute of Graduate Studies and Research ( email )

Cyprus

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