The present study analyses the co-integration of cumin prices in major cumin producing state of Gujarat, one market from each of the 5 districts was selected based on data availability of market arrivals of cumin prices. Price transmission and spatial integration of sample cumin markets were analyzed through employing various statistical/econometric techniques viz. correlation analysis, Johansen Methodology, Granger Causality Test and Vector Error Correction Model (VECM). Correlation analysis showed that the price of the markets in Gujarat were integrated and correlated. Johansen co-integration results showed the long-run equilibrium relationship among the markets indicating that prices in Gujarat cumin markets were well-integrated and move together in response to changes in the demand and supply and price of the product. The Granger causality test indicated that Halved and Gondal are the lead markets because it influenced the prices of most of selected cumin markets with lag of one and two months.

Highlights

• Prices for agricultural commodities are crucial for effective distribution of resources,as they indicate surpluses and shortages and enable farmers to adjust to changing market conditions.
• An effective agricultural marketing strategy is essential for motivating farmers to increase their output.