THE IMPACT OF GOVERNMENT RESPONSES TO THE PANDEMIC COVID-19 ON VEGETABLE PRICES IN MALAYSIA

Abstract

The impact of Covid-19 to the Malaysian economy is critically affecting companies and businesses. Many businesses have been forced to cease operation due to the government’s stringency such as the implementation of the Movement Control Order (MCO), the working from home, the banning of international and domestic travel and others in combatting the outbreak of Covid-19. Nevertheless, these restrictions are important to stop the spread of the virus as the World Health Organization (WHO) proved their effectiveness. The marketplace, where all the wet and dry food sources can be found, has become the main source of place for most people to buy their essential food items. Upon the announcement of the enforcement of lockdown, people started panic buying; hence, it gave a huge impact on the supply and price of groceries including vegetables. Therefore, the aim of this research is to determine the effects of the Covid-19 pandemic caused by the government stringency index which created a fluctuation on vegetable prices in the marketplace in Malaysia. To achieve this, the research framework recognises the factors that caused the fluctuation of the vegetable prices during the pandemic by using the time series data of 70 week-samples of the types of vegetables that were commonly bought by Malaysians. The selected types of vegetables used in this research include large onion, long beans and cucumber. The stringency index involves movement restrictions, assembly restrictions and international travel restrictions. The Covid cases selected are the new recorded cases and confirmed death cases. The total of the collected data are approximately 560, and this figure has already combined the three types of samples. Moreover, this research uses time series data and Autoregressive Distributed Lag (ARDL) method, and the results have shown that there is a relationship between vegetable prices and the stringency index caused by the increase of Covid-19 cases in Malaysia. The results of the analysis prove that when the cases of Covid-19 increased, the government tightened the stringency index which affected the prices of vegetables in the domestic market. In brief, an increase of the new cases and movement restrictions will increase the price of large onions and long beans.