Volatility Clustering and Price Dependency of Turmeric amongst the State of India

Arya Kumar and Uma Sankar Mishra

Pricing of any agricultural product from its past price and predicting its value is not always true as the price of a product might be dependent on various other factors. Therefore, the study encompasses the pricing as a tool to minimize the risk associated with measuring and predicting the value of the agro products. The aim of this paper is to support the farmers in identifying one of the factors that influence the value of agro products. There exist several factors in pricing a product like its past price, demand and supply or the change of price of any other product Taheripour and Tyner (2008). It is also observed that the prices of agro products are highly volatile due to difficulty in fixing the price. So the paper tries to identify a new area of price dependency of one state i.e. Odisha (India) with other states of India. In this study, the weekly turmeric prices of Odisha are considered for the last nine years along with the other turmeric producing states of India. The study measures the price volatility clustering of Odisha turmeric prices and measure the long run and short run price dependency of other states. The paper also studies the causal relationship between the prices of Odisha and other states. From the analysis the result confirms the existence of volatility clustering in turmeric prices of Odisha (India) and it also shows the existence of long run and short run relationship between the prices of turmeric of all the states of India. The study also highlights the existence causal relationship between the variables. So as to reap maximum benefits the farmers, policy makers and concern authority can consider this factor to fix the price of the turmeric and take on time marketing decisions.

Volume 11 | 10-Special Issue

Pages: 228-235

DOI: 10.5373/JARDCS/V11SP10/20192795