Market Co-integration and causality between prices of mango

Ravishankar Pardhi, Rakesh Singh, Anand S. Tingre and Suhas S. Potdar

Indian Journal of Agricultural Marketing, 2022, vol. 36, issue 2

Abstract: The e-NAM scheme becomes a consortium for small holding farmers to do business with their farm produce. Hence it is beneficial to carry out import and export between the countries and get relative advantage. The present study was conducted with consideration of the same objective to workout co-integration between prices of mango in Varanasi market and International market. Varanasi market was selected purposively as it is the major market of the highest producing state. The secondary data of prices were collected from Agricultural Produce Market Committee, Varanasi and Food and Agricultural Organization for the period 1993–2015. The data were collected only for six months of the year from March to August as fruit becomes available in these months only and it was analyzed using Johansen co-integration test through E-views 7.0 software. Data series between the markets showed long run and short run associations between the selected markets. The significant coefficient of at least one error correction term confirmed the results of co-integration between domestic and international prices of mango. The results of Vector Error Correction Model revealed that the coefficient of the error correction term was negative and significant in both the markets. This implies that the prices are stable in the long-run and any deviation in their prices due to external shocks that occurred in the short-run was well adjusted by the market forces over time. Results of granger causality showed the existence of unidirectional short run causality in the selected markets and International market prices lead to the prices in Varanasi market. Therefore, it is needed to fetch the attention of Indian mango at the world level, by refining the quality of mango fruit through the development of infrastructure and cold storage facilities in every market.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ags:injagm:399828

DOI: 10.22004/ag.econ.399828

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