Forecasting wholesale price of coarse rice in Bangladesh: A seasonal autoregressive integrated moving average approach

Ma Islam,Mf Hassan,Mf Imam,Sm Sayem

doi:10.3329/jbau.v11i2.19925

Abstract

This article attempts to develop the model and to forecast the wholesale price of coarse rice in Bangladesh. Seasonal Autoregressive Integrated Moving Average (SARIMA) models have been developed on the monthly data collected from July 1975 to December 2011and validated using the data from December 2010 to December 2011. The results showed that the predicted values were consistent with the upturns and downturns of the observed series. The model with non seasonal autoregressive 1, difference 1 and moving average 1 and seasonal difference 1 and moving average 1 that is SARIMA (1,1,1)(0,1,1)12 model has been found as the most suitable model with least Root Mean Square Error (RMSE) of 61.657, Normalised Bayesian Information Criteria (BIC) of 8.300 and Mean Absolute Percent Error (MAPE) of 3.906. The model was further validated by Ljung-Box test (Q18=17.394 and p>.20) with no significant autocorrelation between residuals at different lag times. Finally, a forecast for the period January 2012 to December 2013 was made. DOI: http://dx.doi.org/10.3329/jbau.v11i2.19925 J. Bangladesh Agril. Univ. 11(2): 271-276, 2013

Highlights

Rice is one of the staple foods in Bangladesh
This study aims at developing univarite time series models to forecast the monthly wholesale price of coarse rice in Bangladesh
The monthly data of the wholesale prices of coarse rice (Tk. per quintal) from the year July 1975 to December 2011 have been collected from Department of Agricultural Marketing, Food Planning and Monitoring Unit (FPMU) of the Ministry of Food System Management Division of Bangladesh

Summary

Introduction

Rice is one of the staple foods in Bangladesh It alone constitutes the lion share (96%) of total food grain produced in Bangladesh (BBS 2010). It is the most important crop to millions of small farmers who grow it on millions of hectares throughout the region, and to the many landless workers who derive income from working on these farms. Aman and Boro in all the three seasons various varieties of coarse rice are cultivated and produced, and government through various operation release mainly coarse rice. Any fluctuation in the price of coarse rice always makes government in anxiety as the fluctuation in coarse rice price has great impact on the millions of its producer and consumers (Brennan 1995)

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Conclusion