Abstract

This paper provides an insight into the price behavior of turmeric in Tamil Nadu by analyzing the price data of 26 years (1986-2012) to trace the presence of price cycles using Bry-Boschan algorithm. Market integration in three major turmeric production and marketing centers of South India namely, Erode, Nizamabad and Duggirala was analysed by using Johansen’s multiple co integration framework. The hypothesis of declining trend in prices was not found in turmeric price and in contrast , a positive trend was observed. Turmeric price exhibited a cyclical behavior with a length of 5 years approximately (peak to peak). Length of the price cycle was not dependent on the percentage change of price within a cycle. The time spent in slump was higher than the time spent in boom for turmeric. In this case, price cycles had a consistent shape, which provided scope for forecasting turmeric price. The study also found the existence of better integration between the three selected markets. Considering the price cycles and forecasted price, suitable guidelines could be formulated to minimize the loss to the farmers due to price fluctuations. Since all the selected markets exhibited market integration, the policies could be generalized for major production centers as well.

Keywords: Turmeric, Price cycle, Bry-Boschan, Co integration, policy