Decoding Global Tea Trade: Unveiling Market Dynamics in India

D. Murugananthi, M. Priyadharshini and S. Aruna Prabha

Asian Journal of Agricultural Extension, Economics & Sociology, 2024, vol. 41, issue 12, 6

Abstract: Tea is the second important beverage consumed Worldwide after water. Domestic consumption of tea in India had increased from 346 M kg in 1980 to 1135 M kg in 2020. The price of tea in global market keeps wavering due to demand and supply dynamics, labour problem, market competition, pandemic and so on. Tea is one of the Internationally traded commodity and price is the key variable which links the markets globally. If countries are linked by trade in a free market regime, global demand and supply shocks will have an equal impact on the domestic and international prices. Hence, the present study analysed the price integration of tea among the three different markets globally. The major tea markets taken for the study are Kenya (Mombasa), North India (Kolkata) and South India (Coonoor - CTTR) markets. To study the price variation seasonal decomposition was used. ADF test was used to assess the stationarity, Johansen cointegration and VECM model was used to analyse the long term cointegration among the markets. Granger causality was used to assess the direction of flow of information across markets. All the price series are first difference stationary. The study revealed that the Kolkata market played a lead role in determining the prices. The presence of one co- integration equation among auction prices of tea markets and indicated the presence of long run equilibrium relationship among the auction markets.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Date: 2024
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/367868/files/Prabha41122024AJAEES112455.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:ajaees:367868

Access Statistics for this article

More articles in Asian Journal of Agricultural Extension, Economics & Sociology from Asian Journal of Agricultural Extension, Economics & Sociology
Bibliographic data for series maintained by AgEcon Search ().