Price transmission and market integration: A comprehensive study of India's onion market

B.A. Pavana, O.p Singh, S.R. Devgowda, Ankit Yadav and M. Nagaveni

Indian Journal of Agricultural Marketing, 2025, vol. 39, issue 2

Abstract: The study assessed price transmission and co-integration among India's major onion markets by examining secondary data on monthly wholesale prices of onions taken from Agmarknet over a 15-year period, from January 2006 to December 2020, using Granger causality tests and Johansen co-integration tests. The findings demonstrated that the data were stationary at first difference but non-stationary at levels. The results of the Johansen co-integration test indicated the presence of three co-integrating relationships among the onion markets, affirming their long-run equilibrium and suggesting that these markets functioned effectively with competitive price transmission. The Granger causality test revealed that price changes in Mumbai, Ahmedabad, Pune and Bengaluru are interconnected. Mumbai and Ahmedabad, Pune and Ahmedabad, and Mumbai and Bengaluru influence each other's prices, while Ahmedabad and Bengaluru, Pune and Bengaluru, and Mumbai and Pune have a one-way influence. Bengaluru, Ahmedabad, Pune, and Mumbai have no price influence on each other. These findings suggest that policies to regulate or stabilize onion prices should consider the interconnectedness of these markets, especially for Mumbai, Ahmedabad, Pune, and Bengaluru, as price changes in one market can significantly impact the others.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:injagm:400087

DOI: 10.22004/ag.econ.400087

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