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Price Dynamics and Market integration of Sorghum and Millet Markets in Ghana

Author Affiliations

  • 1Department of Agricultural Economics, Prof. Jayashankar Telangana State Agricultural University, Hyderabad, INDIA
  • 2Department of Agricultural Economics, Acharya N. G. Ranga Agricultural University- Bapatla, INDIA
  • 3Department of Agricultural Economics, Prof. Jayashankar Telangana State Agricultural University, Hyderabad, INDIA

Res. J. Agriculture & Forestry Sci., Volume 3, Issue (9), Pages 11-21, October,8 (2015)

Abstract

This present study was conducted to examine the price dynamics (volatility), market integration and price transmission dynamics of sorghum and millet markets in Ghana. We sampled six major markets for each of the selected crops, comprising of Techiman, Tamale, Bolgatanga, Wa, Kumasi, Accra for the analysis with Tamale as the reference markets for both crops. The dataset for the analysis was monthly average secondary prices from January 2006 to December 2013. The estimations were performed using momentum threshold autoregressive model and threshold vector error correction model. The results of the consistent momentum threshold autoregressive (CMTAR) model revealed co integration and asymmetric adjustment. In both sorghum and millet commodities markets, the markets in relation to the reference market exhibited asymmetric adjustment in the long-run with little adjustment for positive deviations as compared to the substantial decay for a negative deviation. This implies that intermediaries’ response quickly to price movements that squeeze the profit margin than movements that stretches margin. Tamale was found to be the market leader as the market does not responds to perturbation from the other markets. Finally, there were higher levels of price instability indices and price risk in all markets for the commodities under study in the country accompanied by typically periods of higher persistent and explosive volatility levels.

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