Price Dynamics of Jayadhar Cotton (Gossypium herbaceum L.) in Karnataka
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Date
2011
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Publisher
UAS, Dharwad
Abstract
Agricultural marketing plays an important role not only in stimulating
production and consumption, but in accelerating the pace of economic development.
Analysis of price and market arrivals over time is important for formulating a sound
agricultural price policy. Fluctuations in market arrivals largely contribute to the price
instability of the produce. In order to device appropriate ways and means for reducing
price fluctuations of agricultural commodities, there is a need to have a thorough
understanding of price behavior over time and over space. Such an analysis is also
useful to farmers in order to decide the optimum time for disposing their produce to
their best advantage. Therefore, the present study was undertaken by collecting
monthly prices and arrivals of Jayadhar cotton for a period of 21 years (1989-90 to
2009-10), in major Jayadhar cotton markets of north Karnataka. An increasing trend
in arrivals and prices was observed in all the markets. Seasonal indices of Price in
Jayadhar cotton was found to be highest during July and August in Ranebennur
market as well as Kottur market, where as it was highest during February and March
in Hubli and Gadag markets owing to the variations in the market structure in selected
markets. The arrivals were found to be low in July and August in all the markets.
Uneven cycles were observed both in arrivals and prices in all the markets. Response
of Jayadhar cotton arrivals to prices in all the markets, both in long run and in short
run, showed a negative relationship, except in Kottur market, which implied that as
the price of Jayadhar cotton increased, when arrivals were low. ARIMA model is used
to forecast Jayadhar cotton prices. The forecasted prices in all the markets showed
higher price during February, March and August months which indicated to farmers
to sell the Jayadhar cotton during these months for price advantage. Analysis of zero
order correlation showed that their existence of a strong integration among all the
Jayadhar cotton markets.