Price Dynamics and Market Integration among Major Tomato Markets in India
Published by: Admin
Authors: Tusoing Alphonse Houmai, Cenmichon Khodang, Oinam Krishnadas Singh, Chow Suliyaa Mantaw, and Leichonbam Lanchenba Meetei
Abstract
The study analyzed the price transmission and spatial integration across tomato-producing (Nashik, Kolar, Madanapalle, and Solan) and consuming (Azadpur, Bangalore, Kolkata, and Chandigarh) markets using monthly price arrival data from 2012 to 2023. Econometric tools such as the Augmented Dickey-Fuller test, Phillips-Perron test, Johansen’s cointegration test, Granger causality, and principal component analysis were employed. Monthly price variations were assessed using seasonality indices. Johansen’s co-integration test revealed strong integration among the selected markets. The Granger causality analysis identified Bangalore and Kolar as the major transmitters of price information through multiple unidirectional causal relationships, while Kolkata emerged as the most interconnected market by exhibiting several bidirectional relationships. Most markets exhibited a unidirectional or non-price movement relationship, while a few showed bidirectional price movements. A seasonality index greater than one was observed in July, August, and November for all markets, indicating farmers received a higher-than-average price. Principal Component Analysis revealed that only one component had an eigenvalue greater than or equal to one. The findings suggest prioritizing price stabilization measures in major price-transmitting markets while strengthening market coordination through highly interconnected markets.