MARKET INTEGRATION AND PRICE VOLATILITY OF GARLIC IN SELECTED MARKETS
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Date
2023-09-22
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UHF,NAUNI
Abstract
ABSTRACT
“Market Integration and Price Volatility of Garlic in selected markets” was conducted during 2022-23. The
study was under taken in Himachal Pradesh and nearby garlic markets of North-India . Solan, Ludhiana, and Kullu(Bhuntar),
were selected as producer market where as Mandi (Dhanotu), Chandigarh(fruit and vegetable wholesale market), Ambala
and Delhi(Azadpur) were selected as consumer market . The study was conducted on secondary data for a time period of
sixteen years(2007-2022).The data for the study was collected from AGMARKNET, APMC records and other various
market data websites. The analysis of price behavior was performed with the help of trend analysis, Compound annual
growth rate, variability analysis using Cuddy- Della Valle index and seasonality analysis. Market integration among the
selected markets was examined using Correlation analysis and various advanced econometric techniques like Johansen’s co
integration, VAR based Vector Error Correction model, Granger causality test, Impulse response function and ARCH model
for volatility. The analysis displayed that highest mean prices were shown by Kullu(Rs.5928.74/qtl) and highest mean
arrivals were shown by Delhi (121.2 M.T). Arrivals showed more variability in comparison to prices in selected markets
.All the selected markets of garlic showed positive linear growth in prices whereas in case of arrivals significant growth was
observed in Solan ,Mandi, Chandigarh, Delhi,and Ambala. In selected markets positive monthly growth rate was observed in
prices during the month of December ,January and February , which are the offseason months for arrivals for garlic market.
The variavility analysis revealed that arrivals of all the markets showed higher value of variability in comparison to prices in
the respective markets. January showed highest variability in mean prices. January showed highest mean prices in all the
markets except for Amabla which showed highest mean value in December. In all the market prices showed higher value of
seasonal indices in the month of January. A high degree of correlation was observed between Solan and Kullu market(0.83).
All the selected markets were stationary at level. Johansen co integration tests showed existence of seven co integration
equations among the selected markets which revealed high degree of co integration. Among the selected markets , the
market prices speed for adjustment of equilibrium was analysed using VECM,which was highest in Chandigarh i.e 57 per
cent .One or two lagged month prices of Chandigarh affected all the markets. Ganger casualty model showed a bidirection
causal relationship between Chandigarh- Solan, Chandigarh,-Mandi, Chandigarh-Kullu. Impulse response function revealed
response of selected markets after one unit deviation shock in key market. It was revealed that prices started to stabilize after
six to seven months. Through Arch model, it was revealed that Chandigarh prices showed high volatility.