PRICE BEHAVIOUR, EXPORT COMPETITIVENESS AND DIRECTION OF TRADE OF SELECTED CEREALS IN ANDHRA PRADESH
Loading...
Date
2016
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Acharya N.G. Ranga Agricultural University
Abstract
The study entitled “Price behaviour, Export competitiveness and Direction of trade of selected Cereals in Andhra Pradesh” was undertaken to analyse the price trend of paddy and maize, price volatility, price forecasts and validating them with real time prices, to analyse the extent of market integration among major paddy and maize markets, direction of trade of rice and maize exports from India and to study export competitiveness of selected cereals in India.
The study was conducted in selected paddy and maize markets viz., Nizamabad and Suryapet (Andhra Pradesh), Sindhanur (Karnataka) and Toofanganj (West Bengal) markets for paddy crop and Nizamabad (Andhra Pradesh), Udumalpet (Tamil Nadu), Davanagere (Karnataka) and Kota (Rajasthan) markets for maize crop, which were purposively selected based on the magnitude of arrivals. The data pertained to the period from January, 2000 to December, 2015 for Nizamabad, Suryapet and Sindhanur markets and from January, 2005 to December, 2015 for Toofanganj market. In the case of maize, the data were collected from January, 2003 to December, 2015 for all selected markets from the registers maintained by the respective market committees and from agmarknet website.
xx
There was an increasing trend in the prices of paddy and maize in all the selected markets and were highly significant at 1 per cent level of significance. The monthly increase in prices of paddy was found to be highest in Toofanganj market (Rs. 7.35/qtl), whereas it was the lowest in Nizamabad market (Rs. 5.56/qtl). In respect of monthly increase in prices of maize was highest in Udumalpet market (Rs. 6.78/qtl), whereas it was lowest in Nizamabad market (Rs. 6.14/qtl).
In all the selected markets of paddy and maize, seasonal variations in prices were observed. The results of seasonal indices indicated that the highest seasonal indices of prices were observed in the months of July (112.32) and September (106.21) in Nizamabad market followed by Suryapet in the months of February (106.66) and September (105.34), and October (103.8) and February (103.04) in Sindhanur market and September (103.74) and October (103.52) in Toofanganj market for paddy. The lowest seasonal indices of prices were observed in the month of May (92.11 and 91.44) in Nizamabad and Suryapet markets followed by June (94.62 and 98.92) in Sindhanur and Toofanganj markets respectively.
In respect of maize, in Nizamabad market the maximum prices prevailed in March, April, July, August and September and minimum prices were found in October (96.21). The prices started reviving from March and the prices were fairly high in July (105.17). In Udumalpet market, the month of August (110.75) showed maximum price for maize. The minimum price was observed in January (92.86). In Davanagere market of Karnataka, the maximum price was realised in July (107.36). The minimum price was found in October (90.97). In Kota market the maximum price was observed in the months of March (103.51) and July (104.32). The price of maize was at its minimum in October (93.69).
No price cycles were discernible in the selected markets of paddy as well as maize. The irregular fluctuations in prices did not exhibit any definite periodicity in any of the selected markets.
The results of ARIMA model for paddy indicated that the per quintal prices from November, 2015 to April, 2016 would be ranging from Rs. 1,800 to Rs. 1,847 in Nizamabad, Rs. 1,641 to Rs. 1,703 in Suryapet market, Rs. 1,835 to Rs. 1,872 in Sindhanur market and Rs. 1,503 to Rs. 1,555 in Toofanganj market. When forecasts were compared with real time prices, it was observed that ANN model was relatively closer to real time prices of paddy in Nizamabad market, while single exponential smoothing model was better in and Toofanganj market. Results obtained through ARIMA model were relatively close real time prices of paddy in Suryapet and Sindhanur markets.
xxi
For maize crop the results of ARIMA model indicated that the per quintal prices from November, 2015 to April, 2016 would be ranging from Rs. 1,300 to Rs. 1,333 in Nizamabad, Rs. 1,542 to Rs. 1,484 in Udumalpet market, Rs. 1,360 to Rs. 1,314 in Davanagere market and Rs.1,320 to Rs. 1,196 in Kota market. When forecasts were compared with real time prices, it was observed that single exponential smoothing model was relatively closer to real time prices of maize in Nizamabad market, Davanagere and Kota markets, while ARIMA model was better in Udumalpet market.
Monthly prices of paddy corresponding to Nizamabad and Suryapet markets became stationary at level, whereas the prices of Sindhanur and Toofanganj markets became stationary only after first differencing. Johansen’s multiple co-integration tests revealed the presence of two co-integrating equations at 5 per cent level of significance and confirmed the long-run equilibrium relationship among the markets. The causality test revealed a bi-directional influence of paddy prices between Sindhanur and Nizamabad, Suryapet and Nizamabad and Sindhanur and Suryapet markets. The Toofanganj market prices have depicted uni-directional causality on the prices of Nizamabad and Sindhanur and Suryapet market prices have shown uni-directional causality with Toofanganj market prices. Nizamabad market came to short run equilibrium within 24 days as indicated by co-efficient values. The results obtained through Vector Error Correction Model (VECM) showed that most of the markets considered under this study were integrated to each other.
The findings of the ADF test suggested that monthly modal prices of maize in Nizamabad, Udumalpet and Kota markets attained stationarity at their level whereas, Davanagere market became stationarity only after first difference.The co-integration test revealed the presence of three co-integrating equations at 5 per cent level of significance and confirmed the long-run equilibrium relationship among the selected maize markets. The causality test proved the bi-directional causality between Davanagere and Nizamabad and Kota and Davanagere markets. Nizamabad market showed uni-directional causality with Udumalpet and Kota market prices. Davanagere and Kota market prices showed uni-directional causality with Udumalpet market prices. Udumalpet market came to short-run equilibrium as indicated by level of significance and speed of adjustment was rapid ie., any disturbance in price would get corrected within 12 days in Udumalpet as indicated by co-efficient values. The results of Vector Error Correction Model (VECM) showed that most of the markets considered under this study were integrated to each other.
The price series of Toofanganj market showed the presence of price fluctuations as indicated by the sum of Alpha and Beta co-efficients which were nearer to one (0.9736), whereas in the remaining markets, the volatility
xxii
shocks were not quite persistent. The volatility in maize prices was also observed from ARCH- GARCH analysis and it revealed that maize prices in all the selected markets were less volatile.
The dynamics of changes in terms of quantity of exports of rice and maize from India to different export markets have been measured by employing Markov chain model. The results revealed that others (United Kingdom, USA, Malaysia, Iraq etc.,), Bangladesh, Benin and UAE were found to be stable destinations for Indian rice exports, whereas Sri Lanka, Nepal and Saudi Arabia were the most unstable importers as they could not retain their original share.
Bangladesh, Indonesia, Malaysia and Vietnam and others (Mexico, Japan, Italy, Spain etc.,) were found to be major destinations for Indian maize exports from Markov chain results. The most unstable markets among the maize importing countries were Taiwan and UAE with the zero per cent retention.
The analysis of export competitiveness revealed that the Indian rice and maize have moderate degree of competitiveness as NPCs during all the years studied were between 0.5 to 1.0. PAM analysis indicated that rice and maize cultivation enjoyed a total positive transfer of Rs. 434 and Rs. 152 per quintal respectively on its tradable input costs in overall period. The estimated DRC was less than unity indicating that rice and maize have long run comparative advantage in its cultivation as compared to other countries.
Description
D5314
Keywords
null