MARKET INTEGRATION AND PRICE TRANSMISSION BEHAVIOUR IN APPLE MARKETS OF INDIA
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Date
2019-03
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UHF,NAUNI
Abstract
ABSTRACT
The present study entitled “Market Integration and Price Transmission Behaviour in Apple Markets of India”
investigated the integration among five major apple markets i.e., Dhalli(Shimla), Chandigarh, Bengalore,
Azadpur(Delhi) and Mumbai. The trends in area, production, productivity and export of apple were analysed at
national and state level. The results of state-wise trend analysis during 2006-07 to 2015-16 revealed highest growth
rate in area (2.72%/annum) and production (6.46 %/annum) was found in J&K and Himachal Pradesh respectively.
The trends of apple area and production in India were analyzed by dividing the study period into two sub periods viz.
1960-61 to 1990-91(P-I) and 1991-92 to 2015-16(P-II) and the results revealed significant positive growth in both the
periods with highest growth (6.23%/annum) in P-1 and variability in area was also higher in P-I as compared to P-II.
Trends in production of apple recorded a significant positive growth in apple production during both the periods with
highest growth rate of 7.11 percent per annum during P-I, whereas, variability was highest during P-II (4.58). The
productivity was increasing significantly during P-II (2.73%/annum) and (0.32%/annum) in overall period, whereas,
declininggrowth was foundduring P-I (-0.28%/annum). Decomposition analysis of apple production in India revealed
that in P-I production variation in apple was mainly due to area effect, whereas, in P-II, it was due to yield effect. But
in overall period area effectwas recorded. Period-wise and areas wise trends were also analysed for Himachal Pradesh
from 1973-74 to 2015-16 and the results revealed highest growth rate in area of 3.78 percent per annum during P-I in
potential areas. The growth rates in production in potential areas showed significant increase, while, marginal areas
showed declining growth in all periods except P-II, that exhibit highest growth rates in production (5.86%/annum).
Growth rates in productivity showed significant increase in P-II in all the apple growing areas with maximum growth
in potential areas (3.88%/annum) except marginal areas that showed significant decline in productivity in P-I and
overall period. The decomposition analysis revealed that production variation in all areas in HP during P-I was due to
area effect except marginal areas, whereas P-II was marked by yield effect in all apple growing areas on the account
of varietal improvement. But, the overall increase in production was due to area expansion except marginal areas.
Export trends of apple from India revealed that it is a net importer of apple as a verymeager share only 1.5 per cent of
its production base was exported. The 99 per cent of apple is exported to SAARC nations. The results of seasonality
analysis revealed that that price seasonality of apple markets varied between 23.43 to 93.26 per cent. The highest
seasonal variation was found in Shimla market whereas, lowest in Delhi market. Co integration analysis revealed that
the five selected apple markets although geographically dispersed and spatially separated, yet they depict long run
price association. As per Pair-wise Granger causality there were unidirectional causality between market pairs;
Shimla-Chandigarh, Delhi-Chandigarh wholesale markets and bidirectional causality between Mumbai-Shimla, DelhiShimla,
Bengaluru-Shimla and Bengaluru-Chandigarh and no causality between pairs; Delhi-Mumbai, ChandigarhMumbai,
Bengaluru-Mumbai and Bengaluru-Delhi. The impulse response function revealed that apple prices in all the
markets reacts immediately to the shock by going down initially for 4 to 5 months and then it stabilizes for the
remaining period i.e., the process of price transmission was very quick in selected markets. Structure, conduct and
performance analysis was also performed for Dhalli, Solan, Chandigarh and Azadpur markets which revealed that
Chandigarh and Dhalli markets are highly competitive having GCR of 0.33 and 0.32 respectively, while Delhi and
Solan are comparatively less competitive having GCR of 0.51 and 0.56. Market infrastructure index revealed that
Azadpur and Chandigarh were found comparatively developed markets with respect to infrastructure as compared to
Dhalli and Solan market. Market performance studies revealed that Azadpur market followed by Dhalli market are the
more efficient markets as compared to Chandigarh and Solan markets
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