Exploring Cointegration Between Global and Domestic Prices of Key Edible Oils: 25169
Price: ₹ 1000
https://doi.org/10.35716/IJED-25169
Author: Ramanajneya Reddy Konda, Chiranjit Mazumder, Popavath Bhargav Naik, Subrata Barman, and Renjini V.R.
Author Address: Division of Agricultural Economics, Indian Agricultural Research Institute, New Delhi-110012 (Delhi), INDIA
Abstract
India
meets nearly half of its edible oil consumption demand through imports, making
domestic prices vulnerable to international market fluctuations. The study
examined the relationship between domestic and international edible oil prices
using cointegration analysis. Secondary monthly data from January 2010 to May
2024 were obtained from the Ministry of Consumer Affairs for domestic prices
and the World Bank Commodity Price Data for international prices. The results
revealed substantial price volatility in both markets, particularly for
imported edible oils. All domestic and international wholesale edible oil
prices were stationary after first differencing and exhibited strong long-run
integration. Pairwise Granger causality tests indicated bidirectional causality
between domestic and international prices across all edible oils, except
sunflower oil, where domestic prices did not influence international prices.
The findings offer useful insights for managing international price shocks and
stabilising domestic markets.
Keywords
Cointegration,
domestic prices, edible oils, global prices, price transmission.
JEL Codes
C22, F31,
Q11, Q13, Q18.