Integration of prices in major markets of onion and potato in India

NANDINI SAHA; AMIT KAR; GIRISH K JHA; PRAMOD KUMAR; P VENKATESH; RAJEEV R KUMAR

doi:10.56093/ijas.v91i9.116072

Authors

NANDINI SAHA ICAR-Indian Agricultural Research Institute, New Delhi 110 012, India
AMIT KAR ICAR-Indian Agricultural Research Institute, New Delhi 110 012, India
GIRISH K JHA ICAR-Indian Agricultural Research Institute, New Delhi 110 012, India
PRAMOD KUMAR ICAR-Indian Agricultural Research Institute, New Delhi 110 012, India
P VENKATESH ICAR-Indian Agricultural Research Institute, New Delhi 110 012, India
RAJEEV R KUMAR ICAR- Indian Agricultural Statistics Research Institute, New Delhi

https://doi.org/10.56093/ijas.v91i9.116072

Keywords:

Causality, Cointegration, Market integration, Price transmission

Abstract

Among the vegetable crops, onion and potato prices are more unstable due to seasonality of production, perishable nature, production uncertainty etc. Lack of information on potential market as well as arrival and price behaviour of onion and potato further worsen this situation of its growers. Since market integration helps in achieving price consistency and thus lead to marketing system efficiency, the present study explores market integration and price transmission during the period March 2009 to March 2019 across the wholesale markets using Johansen's cointegration test and Granger Causality test. In this study to test the stationarity of the price series, Augmented Dickey Fuller test and Phillips-Perron test was used. The outcomes of the study strongly supported the presence of co-integration and interdependence of the selected markets from the result of Johansen cointegration test and Granger causality test revealed the presence of bidirectional relationship among most of the markets but also there exists unidirectional relationship among few markets.

Downloads

Download data is not yet available.

References

Anuja A R, Kar A, Jha G K and Rakesh K. 2013. Price dynamics and market integration of natural rubber under major trade regimes of India and abroad. Indian Journal of Agricultural Sciences 83 (5): 555–60.

Awal M A, Sabur S A and Huq A A. 2007. Price integration in potato markets of Bangladesh. Bangladesh Journal of Agricultural Economics 30 (2): 69–80.

Ghafoor A, Mustafa K, Mushtaq K. and Abedulla. 2009. Cointegration and causality: An application to major mango markets in Pakistan. Lahore Journal of Economics 14(1): 85–113. DOI: https://doi.org/10.35536/lje.2009.v14.i1.a4

Mukhtar T and Javed M T. 2008. Market integration in wholesale maize markets in Pakistan. Regional and Sectoral Economic Studies 8(2): 85–98.

Reddy B S, Chandrashekhar S M, Dikshit A K and Manohar N S. 2012. Price trend and integration of wholesale markets for onion in metro cities of India. Journal of Economics and Sustainable Development 3(7): 120–30.

Saha N, Kar A, Jha G K, Kumar P and Venkatesh P. 2019. A study of market integration of tomato in four major markets in India. Indian Journal of Extension Education 55 (4): 128–32.

Sekhar C S C. 2012. Agricultural market integration in India: An analysis of select commodities. Food Policy 37 (3): 309–22. DOI: https://doi.org/10.1016/j.foodpol.2012.03.002

Sidhu R S, Kumar S, Vatta K and Singh P. 2010. Supply chain analysis of onion and cauliflower in Punjab. Agricultural Economics Research Review 23: 445–54.

Vasisht A K, Bathla S, Singh D R, Bhardwaj S P and Arya P. 2008. Price behaviour in fruits and vegetable markets: Cointegration and error correction analysis. Indian Journal of Agricultural Economics 63 (3): 357–58.

Wani M H, Paul R K, Bazaz N H and Manzoor M. 2015. Market integration and price forecasting of apple in India. Indian Journal of Agricultural Economics 70 (2): 169–81.