Market Integration of Selected Calamansi Markets in Luzon, Philippines, 2010-2020

Date

6-2022

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Bates M. Bathan

Committee Member

Julieta A. Delos Reyes, Agham C. Cuevas

Abstract

The study aimed to analyze the presence of vertical and spatial cointegration, speed of price adjustment, and direction of price leadership in selected calamansi markets in Luzon, Philippines, from 2010 to 2020. It also sought to determine the sources of price variation of calamansi. The impacts of market infrastructure, government intervention, and degree of self-sufficiency of calamansi markets to integration were also analyzed in this study.

Secondary data on farmgate calamansi prices and retail calamansi prices from 2010 to 2020 were collected from Philippine Statistics Authority (PSA). Secondary data on the factors analyzed was also gathered including the availability of telecommunication services, number of agricultural processing facilities, road density, and volume of production and per capita consumption of calamansi in each market from PSA and official website of the Department of Public Works and Highways (DPWH). Primary data on the current situation of the calamansi industry along with the conditions of market infrastructure, government intervention, and degree of self-sufficiency in each market was also obtained from key informant interviews. In determining sources of price variation, decomposition of monthly price data using the multiplicative method was done. Several tests were conducted to analyze market integration, namely Unit Root Test, Engle-Granger Cointegration Tests, Error-Correction Model, and Granger-Causality Test.

Results revealed that the farmgate price of calamansi is highest in March and April and lowest in September, while retail calamansi price is highest in April and lowest in September and October. No trend was observed in farmgate prices while minimal upward trend was seen in retail prices. The random components has resulted in sudden increases in the farmgate and retail price of calamansi. No significant cyclical pattern was found.

In general, calamansi markets lacked vertical and spatial integration which requires more than a month of price adjustments to return to equilibrium. Cointegration was mostly found in markets paired with Oriental Mindoro. Reasons for cointegration include reference pricing, high supply-low demand pairs, and presence of existing transactions in other commodities. Majority of the paired markets exhibited either farmgate prices Granger causing retail prices or a bi-directional relationship. Market infrastructure, government intervention, and degree of self-sufficiency positively impacted integration in calamansi markets especially when specifically directed for calamansi.

From the results of the study, the following were recommended: access to technology and provision of extension services on off-season production; practice of collective marketing by calamansi farmers; engagement in contractual arrangements toward improved market linkage; provision of planting materials, processing, and storage facilities; access to communication lines and initiatives on technology literacy; and collection of data on wholesale prices of calamansi.

Language

English

LC Subject

Market surveys

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2022 A14 M36

Notes

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Document Type

Thesis

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