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Journal of Pharmacognosy and Phytochemistry

Journal of Pharmacognosy and Phytochemistry

Vol. 8, Special Issue 2 (2019)

Spatial price integration and price transition in major markets of onion in India


Gummagolmath KC and A Rajalaxmi

This paper has investigated the spatial price integration among the major onion markets for the price efficiency and determined the long run and short run equilibrium relationship of wholesale prices of onion in different markets using co integration, Granger-causality test and Error correction Model. The study is based on the wholesale monthly price data of twelve major regulated markets from seven major onion producing states of India. After checking for the presence of seasonal and non-seasonal unit roots, suitable co integration, Granger causality test model has been applied for modeling the spatial price integration in domestic markets of onion. The application of Johansen method of co integration has revealed that prices in eight markets share stable long-run relationship and the other four markets operates independently in the country. The Granger causality test has shown that Ahmadabad, Hubli, Bangalore, Jaipur and Kolkata markets have influence on price movement in other market to some extent. The Vector Error Correction analysis reveals that, the short run price adjustment is at low level in these markets and the speed of the adjustment of the short run prices to reach general equilibrium level is varied among the markets, it ranged between 14-90%. The reasons attributed for poor short run adjustment in prices may be due to the paucity of information and its dissemination, and poor transportation facilities. By strengthening the market information system enables all the stakeholders of markets to make proper production and marketing decisions.

Pages: 1058-1063  |  1298 Views  350 Downloads

How to cite this article:
Gummagolmath KC and A Rajalaxmi. Spatial price integration and price transition in major markets of onion in India. J Pharmacogn Phytochem 2019;8(2S):1058-1063.

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