Price trend and integration of wholesale markets for onion in metro cities of India

Abstract

Availability of market intelligence on various aspects like the potential markets, quantity arrived and prevailing and expected prices in different regions during different months of the year are important in mitigating many of market related problems. Study reveals that there was high variability in the arrival of onion in the month of March and April in selected markets. Among the markets, the coefficient of variation in both arrivals and prices were found to be higher in Ahmedabad and Kolkata. The zero order correlation matrix between two markets average wholesale prices of onion indicated the high integration among the selected markets except Ahmedabad with Mumbai market. This might be due to the movement of produce from one market area to another depending upon price prevailed in the markets. The competitive conditions prevailing in the selected markets might have influenced the movement of prices in the same direction. The magnitude of regression coefficient revealed that an increase in market arrivals by a MT in a month led to an increase in prices by Rs.6.00/MT and Rs. 0.40/MT in Bangalore and Delhi markets respectively. On the contrary, prices of onion decreased in Ahmedabad (Rs. 6.00), Mumbai (Rs. 10.00) and Kolkata (Rs. 2.00) markets with increase in arrivals by one MT in a month.

Key words: Instability, Market integration, Price behavior