The Cointegrating Analysis of Edible Sunflower Oil Trade in India

Abstract

The present study aimed at using the co-integration analysis, to find out, if or not, there exists a long run relationship amongst the consumption of sunflower oil and the tariff rates, imports, production and domestic prices in India. The co-integration analysis was also used to confirm if there exists market integration for edible sunflower oil for domestic and international markets. Annual time series secondary data was collected for tariff rates, consumption, from various sources for this study. The test was carried out using E-Views software. The results indicate strong long run relationship of consumption of edible sunflower oil with all the independent variables taken into consideration as three cointegrating equations were obtained. Only one cointegration equation was obtained when international prices and domestic prices were subjected to this test, indicating a relationship amongst the domestic and international markets and suggesting the presence of market integration.