Author(s):

Ravishankar Pardhi, Rakesh Singh, Rahul V Tayade and Ranjit K Paul

Abstract: Government of India is making all efforts to increase integration among markets of the country. In this direction e-National Agriculture Market (e-NAM) has been implemented. The e-NAM trading mechanism proposes to regulate all the wholesale market or Agricultural Produce Market Committees (APMCs) under one electronic platform throughout the country. In respect of this the study was conducted to test the extent of market co-integration of price of mango among major market of Uttar Pradesh and its international prices using Johansen Granger Causality Tests and also captures the speed of adjustment to deviations in long run equilibrium in mango markets by using Vector Error Correction Model. In this study, the export prices were considered to be the international prices and secondary data pertains to the year 1993 to 2015 of international price and Lucknow market price was collected from Food and Agricultural Organisation and Agricultural Produce Market Committee Lucknow, respectively. The results showed rejection of the null hypothesis that there was no co-integrated vector (None) and accepted the alternative hypothesis that there is at most 1 co-integrated vector in both trace statistics and maximum eigen value statistics as having no intercept in co-integrating equation (CE) and no intercept in vector auto regression (VAR). It shows long run association between Lucknow market price and International market price used in current study. Vector error correction model showed the Lucknow market price of mango in India will converge towards long run equilibrium after taking 31 per cent monthly adjustments, but in International market it as very low and converge towards long run equilibrium after taking 14 per cent monthly adjustments. The direction of the relationship among price series and market is equally important for which Granger Causality tests were performed. It shows the unidirectional causality revealed in the International market which lead to the prices in Lucknow market.

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