The impact of coronavirus in the economy has been felt globally. China, the epicentre of the virus is also a major supplier of raw materials and components. The shutting of factories and production in China has wreaked havoc in the supply chain, leading to a sharp increase in the prices of certain items such as smartphones and appliances. However, as panic spreads across the globe, industries such as aviation have taken a hit, leading to a drop in airfare.
Here's a look at what has become expensive and what has become cheaper due to coronavirus:
Items that have become expensive
Gold has been the biggest gainer since the outbreak of coronavirus. The retail price of pure gold in Delhi has appreciated by over 12 per cent since January 1. The price of gold has sky-rocketed as investors are opting for safe haven assets such as the yellow metal. Meanwhile, global stock markets are taking a beating amid the outbreak.
2. Masks and sanitisers
Demand for masks and sanitisers that provide the first level of defence against COVID-19 have shot up. In Noida, masks are being sold at a premium of over 300 per cent. A basic surgical mask that is priced at Rs 10 each is being sold for Rs 40, while some N-95 masks, originally priced Rs 150, are being sold at up to Rs 500. Demand for sanitisers has also shot up. The item is out of stock at some pharmacies. On Flipkart, one of the seller listed a 30ml bottle of sanitiser for Rs 999 which is generally sold for close to Rs 35.
The prices of some medicine have increased post the Coronavirus outbreak. Prices of Paracetamol that is commonly used as an analgesic have gone up by 40 per cent. As per a CRISIL report, India imports 69% of its total pharma bulk drugs intermediates from China. The price of Penicillin G, a key raw material used in antibiotics has also soared by 58 per cent.
Xiaomi has increased the price of its popular phone Note 8. The price of the 8GB+64 GB variant of the Xiaomi Note 8 has been hiked by Rs 500. The phone will now be available at Rs 10,499 instead of the earlier price of Rs 9,999.
"The extended shutdown in China is likely to have an impact on our supply chain and, there is a risk of impact on overall quantum of component supplies. While we are working to explore alternative supply channels for components and raw materials, the immediate impact is that the short supply might cause some negative pressure on prices of these components. This has led to the increase in the price of the product temporarily," a Xiaomi spokesperson told Gadgets 360. Xiaomi has also cancelled all on-ground launch events planned in the month of March 2020.
5. Consumer durables
Consumer durable products such as air conditioners, refrigerators, microwaves and washing machines are set to be expensive by as much as 3-5 per cent due to coronavirus. As per a CRISIL report the consumer durables sector has high dependency on Chinese imports. "India imports 45 per cent completely built units of consumer durables from China. In addition, India also imports bulk of consumer durables components from it... Players have already stocked inventory, so impact will be felt only towards the end of Q4 FY20. Product prices could rise next month," the report said.
Items that have turned cheaper
Global oil prices have been on a downward trend since the coronavirus outbreak. Industry demand in China, world's largest importer of oil, has been low. The low price trend has been aggrandised with Saudi Arabia's price war against Russia. The price of crude oil dropped to $31.02 on March 9. Petrol prices have declined Rs 4.55 per litre and diesel Rs 4.7 per litre in Delhi since January 1.
Airfares have been reduced by aviation companies due to a 30 per cent drop in bookings to virus affected destinations. "Southeast Asia and Italy being one of the most preferred destinations for Indians, we can anticipate a drop of about 20-25 percent in terms of future bookings, though it is too early to predict any drastic impact. They are wary of making fresh bookings to the affected locations and airfares to these destinations have dropped by 20-30 percent," Sabina Chopra, Co-Founder, Yatra.com said in a statement.
The demand for non-vegetarian items such as meat and seafood has also tanked amid the coronavirus scare. However, FSSAI has said that the virus doesn't spread through food. The food body has issued a statement saying: "Experience with SARS and MERS suggest that people are not infected with the virus through food. So, it is unlikely the virus is passed on through food and there is no evidence yet of this happening with COVID-19 (coronavirus) to date". The retail price of chicken has fallen to Rs 150 per kg from Rs 180-200. According to the Minister of State Sanjeev Kumar Balyan, the wholesale prices of chicken had come down by 70 per cent.
Following the COVID-19 outbreak, Iran and China has stopped importing tea. As a result, prices of tea have plunged by 40 per cent to Rs 120-130 from Rs 200 a year before, as per a report published in The Economic Times. Additionally, last year's unsold stock of over 50 million kilograms has been carried forward to the present year, adding to the woes of the tea industry.
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today