Dynamics of Prices and Arrivals of RABI Sorghum in Karnataka - An Econometric Analysis
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Date
2011
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Publisher
UAS, Dharwad
Abstract
Fluctuations in market arrivals largely contribute to price instability. Analysis
of price and market arrivals overtime is important for formulating a sound agricultural
policy. Such an analysis is also useful to farmers in order to decide the optimum time
for disposing their produce to their best advantage. In view of studying dynamics of
market arrivals and prices, the present study was undertaken by collecting monthly
prices and arrivals of rabi sorghum in major rabi sorghum markets of Karnataka for a
period of 20 years (1989-90 to 2009-10). An increasing trend in arrivals and prices
was observed in all the markets, but the quantum of increase varied from one market
to another. It was observed that, in all the markets, the arrivals of rabi sorghum was
negligible from May to November Price of rabi sorghum was found to be highest
during off season (December and April) and lowest during harvest season (January -
March), the arrivals were high during March and April. The higher seasonal indices of
prices were observed during March and April during which the arrivals were found to
be low. Uneven cycles were observed both in arrivals and prices in all the markets.
Response of rabi sorghum arrivals to prices in all the markets, both in long run and in
short run, showed a positive relationship, which implied that as the price of rabi
sorghum increased, the arrivals also increased. ARIMA analysis was employed to
quantify the variation in prices and also to forecast rabi sorghum prices. The
forecasted prices in all the markets showed an increasing value. Analysis of zero order
correlation showed that there existed a strong integration among all the rabi sorghum
markets. The analysis revealed that, storing rabi sorghum and selling during off
season (April onwords) would help the producer in getting higher returns. Finally it
was recommended to disseminate the forecasted prices to farmers for their advantage.