Year: 2017 | Month: September | Volume 62 | Issue 3
Cotton Price Forecasting in Major Producing States
DOI:10.5958/0976-4666.2017.00047.X
Abstract:
India is the largest cotton producing and second largest cotton exporting country. India accounting about 26% of the world cotton production. It has the distinction of having the largest area under cotton cultivation in the world with about 11-12 million hectares and constituting about 40% of the world area under cotton cultivation. Cotton is a global crop with high price fluctuation, which depends on the global business cycles. It is a mostly used as raw material for apparel and cloth industry. In addition to production risk cotton farmers encounter high price risk. Thus, it is important to forecast the cotton prices for the benefit of farmers as well as millers who purchase the cotton. The present study is aimed to forecast the prices of cotton of major producing states of India. The time series data on monthly price of cotton required for the study was collected from the AGMARKNET website from January, 2006 to December, 2016 to forecast prices for kharif 2017-18 year harvest months. ARIMA model was employed to predict the future prices of cotton. Model parameters were estimated using the R programming software. The performance of fitted model was examined by computing various measures of goodness of fit viz., AIC, SBC and MAPE. In Kharif season the cotton crop is harvested during December to January. Forecast shows that market prices of cotton, would be ruling in the range of ` 4,600 – 4,900 per quintal (medium staple cotton) in kharif harvesting season, 2017-18.
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