Market integration and price dynamics in major potato (Solanum tuberosum) markets of India

Abstract

Potato (Solanum tuberosum L.) is a cash crop with nutritional value and wider consumer preference. Inadequate cold storage facilities, high price volatility and post-harvest losses are major challenges for the sector. The study examined the price linkages among spatially separated potato markets, viz. Azadpur, Ahmedabad, Bangaluru, Pune and Siliguri using daily price data obtained from AGMARKNET between 2015 and 2024. The Augmented Dickey-Fuller and Phillips Perron tests confirmed the stationarity of all price series at first difference. Trace statistics indicated long-run integration among the selected potato markets. The error correction model was estimated by the Vector Auto-Regression method. A slow adjustment rate was observed in Siliguri (0.64%) and Ahmedabad (3.09%), as they are producing markets, while Bengaluru with a high speed of adjustment (7.62%), emerged as a consuming market. Azadpur was the key price-determining market based on the Granger Causality test. The impulse response function indicated that with price shocks in any market, price fluctuations dissipated by the 10th–15th week in all the potato markets. The provision of infrastructure, market information (particularly for markets with unidirectional causality), price support and the promotion of value addition would enhance the income of growers and the sustainability of the potato sector.