Price behaviour of groundnut in major markets of India

Groundnut is the major oil seed crop in India and it is grown in many states of the country. Market integration concept explains the relationship between the markets that are spatially or temporally separated. The study was based on secondary data from 2002 to 2019. Mandies were selected namely, Gondal and Rajkot (Gujarat), Bikaner and Chomu (Rajasthan), Avalurpet and Tindivanam (Tamil Nadu), Adoni and Kurnool (Andhra Pradesh), Yadgir and Laxmeshwar (Karnataka). Augmented Dickey Fuller test (ADF), Johansen’ Co-integration, Vector Error Correction Model and Granger Causality test were used for analysis. The results of ADF showed that original series were non stationary and after differncing the series at order one it became stationary. It was found that nine groundnut markets were found co integrated (among ten markets). The results of vector error correction showed that the estimated short-term coeficients of the groundnut markets in Adoni, Chomu, Kurnool, and Laxmeshwar were 5.39 per cent, 16.78 per cent, 8.54 per cent, and 11.04 per cent, respectively, and they were corrected within a month by changes in their own prices, with the remainder influenced by other market forces. Prices of groundnut in Gondal market had bidirectional causality with Bikaner, Kurnool, Laxmeshwar, Rajkot and Yadgir markets.