Market integration of wheat in Pakistan

To examine the co-integration between the prices of selected wheat foodgrain markets was analysed using the Johansen's co-integration test and Vector Error Correction Mechanism. Analysis of zero order correlation showed that there existed a strong integration among all the selected markets of wheat. The results of the Augmented Dickey-Fuller (ADF) unit root test for wheat showed that the existing data were non-stationary but their first differences were stationary. After taking the first difference, all the series became stationary which is obvious from the fact that calculated ADF values (8.302693 to-14.17203) for all the markets were less than the critical value (-4.036983) and were free from the consequence of unit root. Johansen's co-integration test for wheat indicated the presence of at least four co-integrating equation at 5 percent level of significance. Hence markets were having long run equilibrium relationship. Thus, the wheat markets in the state of Rajasthan are well integrated in terms of price.

Journal of Agricultural Science and Technology, 2019

Uncertainty in staple food prices places the economy under jeopardy if not managed coherently and markets are not integrated. An attempt was made to analyze the wheat price behavior and extent of integration across selected wholesale and retail markets in India sourcing monthly data from FAO (July 2000-June 2016). Findings indicated that the price in wholesale and retail markets as well as its divergence was lowest in Patna, implying a major production and consumption zone, and highest in Chennai, indicating a negligible production. Monthly price indices exhibited a clear-cut seasonality linking with the arrivals of post-crop harvest. Extent of price integration was examined using Johansen's approach to know whether markets share a linear deterministic trend followed by testing the Law Of One Price (LOOP). The maximum likelihood test indicated a strong integration in different combinations of markets with some market pairs showing unidirectional-causality, while the rest exhibiting either bidirectional-causality or no-causality. Barring Patna, Delhi, and Mumbai's retail and wholesale markets, the rest of the market combinations did not confirm the LOOP. The study advocates rational allocation of resources based on the extent of price integration and reducing the market distortion for improving the overall performance.

Asia-Pacific journal of rural development

This paper examines the cointegration of wheat market prices in Northern Bangladesh. Results are based on weekly wholesale price data on wheat collected from Department of Agricultural Marketing (DAM) in eight markets in the Rangpur Division of Northern Bangladesh. The data have 208 observations for wheat in each of the eight markets ranging over a period of January 2006 to December 2009. Johansen's cointegration test reveals that most of the wholesale markets of wheat in Rangpur Division are cointegrated which indicates that price signals and information are transmitted smoothly across the markets. The bivariate model reveals that price changes in Rangpur Division appear to be organised through Panchagorh and Gaibandha markets as they are the distribution centres of rest of the country. The short run results from the VECM revealed that all the estimated short run coefficients except for twenty-three are statistically significant which suggests that the transmission of price changes from one market to another during the same week is moderate. The finding of the market integration appears to be quite significant for the success of price policy and market liberalisation programmes undertaken in Bangladesh.

Pakistan Development Review, 1997

Efficiency of resource allocation in agriculture depends on the functioning of commodity markets. Although the larger markets that are better connected with the transport and communication network are expected to be well-integrated, the same cannot be said about the smaller, more remote markets. This paper tests integration of agricultural commodity markets in Southeastern Punjab. The region is located off the main trading axis of Pakistan, the Peshawar-Karachi highway, and is mostly served by relatively small markets known as mandis. This study focuses on markets for cotton, wheat, and rice in five towns in the region. Cotton and wheat are the main crops in the area while rice is mostly grown as part of crop rotation aimed at controlling salinity. The analytical framework developed by Ravallion was used to conduct tests of market integration for the three selected commodities. Within this framework, it is possible to test for short-run integration, long-run integration or complete market segmentation. The results indicate that, generally, markets are integrated only in the long run, with short-run integration limited to some special cases. Moreover, the smaller markets are more likely to be isolated as compared to the larger markets. The small markets also take longer to fully adjust to the price shock originating from a more dominant central market. Finally, in the case of rice, it is more likely that a market would be isolated if it were small. This implies that farmers' incentives to grow rice as a means of combating salinity may be constrained by local demand conditions.

2006

Regional market integration in many agricultural commodities has been extensively studied for the insight it provides into the functioning of such markets; such studies provide valuable information about the dynamics of market adjustments, and whether there exist market imperfections, which may justify government intervention. This study used Monthly wholesale prices (Rs. /40 kg) data from January 1995 to December 2003 of Basmati Rice (108 observations) in logarithmic form and empirically estimated the degree of integration in Rice (Basmati) markets of Pakistan's Punjab using the law of one price (LOP) framework and cointegration analysis. Cointegration Results show that all Rice markets are highly integrated in the long run. The high degree of market integration observed in this case is consistent with the view that Punjab's Rice markets are quite competitive and provide little justification for extensive and costly government intervention designed to improve competitiveness to enhance market efficiency.

Pakistan development review

The Indian Journal of Agricultural Sciences

Among the vegetable crops, onion and potato prices are more unstable due to seasonality of production, perishable nature, production uncertainty etc. Lack of information on potential market as well as arrival and price behaviour of onion and potato further worsen this situation of its growers. Since market integration helps in achieving price consistency and thus lead to marketing system efficiency, the present study explores market integration and price transmission during the period March 2009 to March 2019 across the wholesale markets using Johansen's cointegration test and Granger Causality test. In this study to test the stationarity of the price series, Augmented Dickey Fuller test and Phillips-Perron test was used. The outcomes of the study strongly supported the presence of co-integration and interdependence of the selected markets from the result of Johansen cointegration test and Granger causality test revealed the presence of bidirectional relationship among most of t...

One of the main arguments against agricultural trade liberalization in India is that the markets are not sufficiently integrated. The present study makes a systematic attempt to assess the extent and degree of integration among select agricultural markets in India. We have used the common factor representation of the cointegrated series, called Gonzalo–Granger (G–G) model, to assess the extent of market integration. Degree of market integration has been assessed using the persistence profile approach. Our results indicate that the commodity markets that do not face interstate or interregional movement restrictions, like gram and edible oils, appear well-integrated. On the contrary, rice market, subject to the maximum interstate movement restrictions, does not show integration at the national level. The broad implication of the study is that the markets can play a more effective role if supplemented with more open policy initiatives.

2012

This paper empirically evaluates the degree of integration among spatially separated markets using monthly wholesale real price series of tomato and onion from regional markets located in each of the four provinces of Pakistan. Unit root test indicates that the price series are stationary, and are represented as autoregressive model for each region. Results of the error correction model show that the markets of both tomato and onion are spatially integrated, however, the overall degree of integration in onion markets is relatively stronger than in tomato markets. This difference may be attributed to relatively lower degree of perishability in onion as compared to tomato.

Uncertain price movement in staple food commodities puts agrarian economies at risk if not monitored and managed consistently. Hence, an attempt has been made to analyze the price behavior and integration across major wholesale and retail markets for rice and wheat in India. Monthly data (July 2000 to June 2022) on prices viz., wholesale and retail were sourced from the Food and Agriculture Organization and analyzed using growth rate, instability index, seasonal price index, Johansen’s test on cointegration, Granger causality test, and impulse response function. Findings indicated strong evidence of price dynamics in the selected markets in terms of spatial and temporal variation, clear-cut seasonality linking to production, and price divergence between wholesale and retail markets. Johansen’s test indicated a strong integration between wholesale and retail markets exhibiting unidirectional-, bidirectional- and no-causality. Impulse response analysis revealed that the selected wheat...