Year: 2020 | Month: December | Volume 13 | Issue 4
Market Integration of Major Oilseeds and Vegetable Oils in India- Evidence from Karnataka
DOI:10.30954/0974-1712.04.2020.10
Abstract:
This study has analyzed market integration across six major wholesale markets for groundnut, sunflower, and soybean. This paper investigates the market integration of selected oilseeds and respective oil markets in India by employing monthly wholesale prices from 2009 January to 2020 February. The stationarity property of the time series of prices was checked through the Augmented Dickey-Fuller (ADF) unit root test. To get the evidence in which direction the price transmission is occurring among the selected markets, Granger causality test has been used, which confirmed that some markets are influencing each other in a unidirectional way. Others have a bidirectional relationship at a five per cent level of importance, meaning that the chosen oilseed market prices have long-run association. In view of vertical integration Bellary pod market, Chennai oil and Ahmadabad oil markets are the key markets for groundnut, sunflower, and soybean, respectively. Thus, the study concluded that regional markets for selected oilseeds are strongly co-integrated. Furthermore, the study suggested that the Government can smoothen the price in most influencing markets and expect a similar result in other markets. Therefore, there is a need for faster market information movement by strengthening market intelligence by establishing an online marketing system through networking.
Highlights
- Market integration explains how distinct markets are related to one another.
- In India, selected regional markets for selected oilseeds are strongly co-integrated.
- Strengthening of market infrastructure including transportation, storage, and communication is the need of the hour to reap the benefits of market integration.
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