A comparison of price fluctuations for the green chilli and tomato in Dambulla dedicated economic center in Sri Lanka

Abstract

The cultivation of green-chili and tomato has become a prominent income among the farmers in Sri Lanka. Therefore, establishing a statistically equipped market information system and a comparative study is important to identifying the price fluctuations of green-chili and tomato as well as managing the price risk. For this study, 10 years (2004-2013) monthly wholesale prices of green-chili and tomato were obtained from Dambulla Dedicated Economic Centre. The time series analysis was used to analyze the fluctuations of prices and estimate forecasting models for wholesale prices of both selected vegetables. Based on the trend analysis, the quadratic trend models were selected as the best trend models for both green-chili and tomato. Furthermore,𝑆𝐴𝑅𝐼𝑀𝐴(1,1,1)(2,1,2)12 and 𝐴𝑅𝐼𝑀𝐴(2,1,2) models were selected as the most suitable model to forecast the wholesale prices of green-chili and tomato respectively. Moreover, the Granger-causality test and VAR method were revealed that there is an unidirectional causality between wholesale prices of green-chili and tomato.