Market Integration and Price Transmission amongst the Major Wholesale and Retail Markets of Lentil (Lens culinaris / Lens esculenta) in India

Abstract

Background: India has become self-sufficient for cereal production but is still dependent upon pulse imports for fulfilling its domestic demands. These imports are very much capable of influencing the domestic prices, so the present study was undertaken to study the integration and price transmission amongst the major lentil producing states of India i.e. Madhya Pradesh, Uttar Pradesh, West Bengal, Bihar, Rajasthan and Assam. Methods: Out of these six states, altogether ten markets and all India average values were undertaken for the present study based on the quantum of lentil marketed and availability of data. The secondary data was collected from the Agmarknet portal for the lentil crop while Minitab and R software were used for the analysis of the retrieved data. Various techniques like Seasonal Indices (SI), unit-root test, Johansen's cointegration test and Granger causality test were applied to find the results and conclusions of this study. Result: The results have stated that the prices of these ten wholesale and retail markets are highly integrated and most of the markets have a uni-directional relationship with each other. The wholesale and retail markets of Jaipur and Lucknow have little/no relationship with the other markets while they have a bidirectional relationship between their own wholesale and retail market prices indicating that they might be the markets where prices are discovered, as they are not found to be influenced by the other spatially separated markets.