Statistical analysis of market cointegration and price dynamics for garlic in key northern Indian markets
S. Vishnu Shankar1,3, Ashu Chandel1, C. Nandhini2, Adit Kumar Yadav1 and Pranchal Gupta1
1Department of Basic Sciences, Dr. YS Parmar University of Horticulture and Forestry, Solan (HP), India. 2Department of Social Sciences, Kumaraguru Institute of Agriculture, Erode (TN), India. 3Department of Physical Science & Information Technology, Tamil Nadu Agricultural University, Coimbatore (TN), India. Corresponding e-mail: s.vishnushankar55@gmail.com
Abstract: India ranks as the second-largest country in land area and garlic production globally, following China. The study attempted to investigate the price transmission of garlic between the major north Indian markets of India. Attempts were also taken to determine the extent of integration between the markets. The Granger causality test confirmed the presence of bidirectional and unidirectional relationships between markets such as Chandigarh, Delhi, Dehradun, and Shimla. The results showed that garlic price in Shimla mostly depend on the price in neighbouring markets. Both tests of Johansen cointegration confirmed the presence of long-run relationships among the markets. The vector error correction model revealed a positive relationship between Chandigarh - Delhi, and Chandigarh - Shimla markets. Chandigarh and Dehradun markets achieved short-term equilibrium quickly, while the Shimla market attained it more slowly. No short-run equilibrium was observed in the Delhi market. This research will help to understand the interdependencies and equilibrium dynamics among garlic markets, offering insights for market participants and policymakers.
