Vol. 12, Issue 4 (2023)

Author(s):
SS Pachpute, KV Deshmukh, KR Bhaskar and AU Kanade

Abstract:
Soybean (Glycine max L.) is known as ‘golden bean’ and grown in India for dual purpose that is oil seed as well as pulse crop. About 120 soybean growers were selected from two districts (Nanded and Parbhani) in Marathwada region of Maharashtra for study. Cross sectional data were collected from soybean growers with the help of pretested schedule by personal interview method. The data pertains for the year of 2015-16. In case of market integration, the results of ADF test showed that in first difference with lag one, the Augmented Dickey- Fuller (ADF) values of Parbhani (-12.75503) and Nanded market (-13.90505) are lower than that of the critical value (-4.010143) at one per cent level i.e. this implied that the prices series become stationary at first difference level. Co-integration test showed one co-integration equation was significant at five per cent level of significance. It indicated that the selected soybean markets having long run equilibrium relationship and there exists Co-integration between them. The Granger causality test showed that there is unidirectional causality in soybean prices between Parbhani and Nanded markets. As the prices of Parbhani market exhibited unidirectional causality they affect the prices of Nanded market. While the prices of Nanded market does not show any cause and effect. In case of presence of price volatility, the results of ARCH-GARCH analysis revealed that high Alpha (α) which is often associated with a low Beta (β) produces GARCH volatilities with high Vol-of-Vol. It was observed that among the markets the sum of Alpha and Beta is nearer to one i.e. 1.007663 and 1.013004 for Parbhani and Nanded respectively, which indicated that the volatility shocks in the prices of soybean are quite persistent in these markets. The estimates of VECM model revealed that co-integration equation value of Nanded (-4.17290) was significant therefore Nanded market attained short run equilibrium rapidly while Parbhani market came to equilibrium in long run.