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September 24, 2025Journal of international commercial law and technology0 citationsOpen Access

Price Behaviour and Linkages: A Case Study on Potato

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MRM. V. Reddy

Key Points

  • Significant co-integration exists among potato markets, particularly with Bengaluru responding to price changes in Amritsar and Agra.
  • Weekly price data analysis from 2015 to 2025 underscores the influence of market dynamics and spatial integration on prices.
  • The study utilizes Johansen’s co-integration and Vector Error Correction Model to assess long-run and short-run price adjustments.
  • Robust infrastructure and policy measures are essential to reduce price volatility and bolster farmer income stability.

Abstract

Potato (Solanum tuberosum L.), regarded as the “king of vegetables,” is India’s fourth most important food crop after rice, wheat, and maize, contributing significantly to nutritional security and farm income diversification. India, the world’s second-largest producer with 60.18 million tonnes (2024–25), accounts for ~16% of global output. Despite its strong production base, market integration and price volatility pose major challenges for farmers and consumers alike. This study investigates the spatial integration, price dynamics, and causality among four major potato markets—Agra, Amritsar, Bengaluru, and Chikkaballapura—using weekly wholesale price data from 2015 to 2025. Stationarity was examined through ADF, PP, and KPSS tests, while Johansen’s co-integration and Vector Error Correction Model (VECM) were employed to capture long-run equilibrium and short-run price adjustments. Results reveal significant co-integration among the selected markets, with Bengaluru prices responding strongly to Amritsar and Agra, while Chikkaballapura exhibited short-run corrections influenced by terminal markets. Granger causality analysis confirmed both uni- and bidirectional linkages, highlighting Bengaluru–Chikkaballapura interdependence. Findings underscore the necessity of robust cold storage, logistics, and market linkages to mitigate volatility and strengthen farmer incomes. Policy interventions, alongside technological innovations such as aeroponic seed systems, will be critical to ensure stable and sustainable growth of India’s potato sector.

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Cite This Study

M. V. Reddy (2025) studied this question.

synapsesocial.com/papers/68d6e1248b2b6861e4c3f82ehttps://doi.org/10.61336/jiclt/25-01-27
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