Price dynamics in Indian wholesale wheat markets: Insights and implications

AMIT THAKUR; POULAMI RAY; KAMLESH KUMAR ACHARYA; ABHIJIT DAS; RAJ JAISWAL; UNNI RAVISHANKAR; RAJU R; SENDHIL R

doi:10.56093/ijas.v91i8.115880

Authors

AMIT THAKUR ICAR-Indian Institute of Wheat and Barley Research, Karnal, Haryana 132 001, India
POULAMI RAY ICAR-Indian Institute of Wheat and Barley Research, Karnal, Haryana 132 001, India
KAMLESH KUMAR ACHARYA ICAR-Indian Institute of Wheat and Barley Research, Karnal, Haryana 132 001, India
ABHIJIT DAS ICAR-Indian Institute of Wheat and Barley Research, Karnal, Haryana 132 001, India
RAJ JAISWAL ICAR-Indian Institute of Wheat and Barley Research, Karnal, Haryana 132 001, India
UNNI RAVISHANKAR ICAR-Indian Institute of Wheat and Barley Research, Karnal, Haryana 132 001, India
RAJU R ICAR-Indian Institute of Wheat and Barley Research, Karnal, Haryana 132 001, India
SENDHIL R ICAR-Indian Institute of Wheat and Barley Research, Karnal, Haryana 132 001, India

https://doi.org/10.56093/ijas.v91i8.115880

Keywords:

GARCH, Price dynamics, Price volatility, Seasonal price index, Wheat

Abstract

Wheat is an integral part of food as well as nutrition security holding a significant share in the consumption basket. Hence, any extreme deviations in the staple food price will affect the prospects of the economy. In the context, we analysed the price dynamics and price volatility in Indian wholesale wheat markets using compound annual growth rate, instability indices, and Generalised Autoregressive Conditional Heteroscedasticity (GARCH) model. The study sourced monthly data (July 2002 to June 2019) from the AGMARKNET portal for 15 states. Research findings indicated that the wholesale price, as well as divergence between maximum and minimum price, was highest in the case of Kerala implying the non-production region. Monthly price indices (highest as well as lowest in Haryana respectively during December: 109.90 and July: 91.48) exhibited a clear-cut seasonality attributed to the wheat arrivals post-crop harvest. Barring Maharashtra, the growth and variation in seasonal price indices were positive and relatively low respectively across markets. Corroborating the price trend, Kerala exhibited the highest volatility as evident by the GARCH model estimates, followed by Gujarat, Haryana and Chhattisgarh. Inter alia, volatility in wheat prices is directly linked to regional production. The study advocates for effective dissemination of market information such as price forecast, demand and supply to counter the price volatility as well as decision making for profitable agri-business.

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