International Journal of Agriculture Extension and Social Development

author(s)
Ramakrishna Gunu, Sreenivas Akula and R Vijaya Kumari

abstract
The main objective of the study is to assess cointegration of major redgram markets and price movement in major markets in India using important econometric tools like Augmented Dickey-Fuller (ADF), Johansen’s cointegration test, Granger causality test and Vector Error Correction Model (VECM). The present study examines the price behavior and market integration of redgram across major domestic markets Gulbarga, Mumbai, Indore, Vijayawada, and Tandur along with imported prices. Stationarity analysis using the Augmented Dickey–Fuller (ADF) test revealed that all price series were non-stationary at their levels but became stationary after first differencing, confirming the presence of unit roots and enabling further cointegration and causality analyses. Granger causality results indicated both bidirectional and unidirectional causal relationships among markets. A notable bidirectional causality between Mumbai and Vijayawada reflected strong mutual price influence, while multiple unidirectional causal flows toward Indore highlighted its role as a price-receiving market dependent on Gulbarga, Mumbai, Tandur, and imported prices. The Vector Error Correction Model (VECM) demonstrated significant long-run adjustments and short-run dynamics, with lagged prices of Mumbai and Tandur exerting considerable influence on current prices across all major markets. Vijayawada’s lagged prices also affected Mumbai, underscoring inter-market linkages between southern and western regions. Overall, the findings confirm strong market integration and dynamic price transmission among redgram markets, offering valuable insights for price forecasting, market intelligence, and policy formulation aimed at enhancing efficiency in redgram marketing and procurement.