Price behavior and forecasting of groundnut prices in Hubballi andRaichur markets of Karnataka State

Abstract

The present study is mainly focused to analyse the behavior of groundnut prices in Hubballi and Raichurmarkets in Karnataka and forecasting the prices for the future. Based on secondary data from January 2007 to July 2022,the future prices were predicted for the next six months of current 2022, by employing the Auto Regressive IntegratedMoving Average (ARIMA) technique. The annual increase in prices of groundnut in Hubballi and Raichur markets wereobserved to be ` 172.2 and 250.4 per quintal per annum, meanwhile there is a decrease in Arrivals. The highest seasonalindex was observed in the month of November and lowest seasonal index was recorded in January for Hubball. Similarlyhigh seasonal index was observed in the month of March and lowest in October for Raichur Market. Mainly Two and Threeprice cycles were noticed for groundnut prices in Hubballi and Raichur Market, respectively. Maximum R-Square (0.81),(0.89), minimum Mean Absolute Percentage Error (MAPE) (10.22), (8.91), Root Mean Square Error (RMSE) (432.76),(429.17), Mean Absolute Error (MAE) (311.92), (309.62) and Normalized BIC (12.22) and (12.23), respectively forHubballi and Raichur, were used as a criteria to select the best model for price forecasting. Based on the criteria the model(0,1,3) (0,0,0) and (1,1,1) (0,0,1) were found to fit the time series to predict future prices. The forecasted price of groundnutwould be ranging from ` 4182 to 4390 and ` 5186 to 5538 per quintal during the cram months in Hubballi and Raichurmarkets, respectively.