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Price Behaviour of Major Crops in Bangladesh: An Empirical Analysis
Price Flexibility and Price Trend Analysis of Major Crops in Bangladesh
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Sharp changes in agricultural prices negatively affected the entire economy as the price mechanism is not properly materialized in a highly unstable price situation. So, price behaviour analysis is significantly important to the whole economy. This work has attempted to analyze the price flexibilities, fluctuations, monthly price trends and spatial price relationship of selected crops viz., Boro, wheat, lentil and potato in Bangladesh. Correlation coefficient and Engle- Granger co-integration test were used as a tool for studying integration between selected market pairs. In estimating price fluctuation of selected crops with its own supply, price flexibility coefficients have turned out significant except lentil. Cross-price flexibility of Aman and wheat with Boro found inverse flexibility relationships, meaning these crops are substitute. Real price fluctuation was the highest for potato followed by lentil, wheat and Boro. Three year price trends depict the local price trend, which may help farmers in taking appropriate decisions and ultimately in getting higher price benefits from the market. Moreover, the respective markets of the selected crops were found well integrated.
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