Analysis of Variations in Prices of Cabbage of Carrots, Philippines, 1990-2021

Date

6-2023

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Julieta A. Delos Reyes

Committee Member

Agham C. Cuevas

Abstract

The study analyzed the prices of cabbage and carrot in the Philippines covering the period from 1990 to 2021. Specifically, it: determined the trend in cabbage and carrot production and prices in the Philippines for the 1990-2021; identified the price components of cabbage and carrot; identified the factors influencing the fluctuations in cabbage and carrot prices; and came up with recommendations to stabilize the prices. The study utilized secondary data from PSA, UNComtrade, FAOSTAT, and BSP. The multiplicative model of price decomposition and the ratio-to-moving average method were used to decompose the prices. Further, trend analysis, residual method, regression analysis, and Pearson correlation analysis were performed.

Trend analysis revealed that from 1990 to 2021, cabbage production increased, and from 2000 to 2021, carrot production rose due to favorable weather conditions and crop shifting. Additionally, nominal farmgate and retail prices of cabbage and carrot showed upward trends, while their real prices declined over time.

Cabbage was expensive during the planting season and holidays, and cheaper during the harvest period. Carrot's seasonality was demand and supply driven, with high seasonal indices during holidays. Smuggled carrots had no impact on seasonality. Rainfall significantly affected price seasonality by improving crop quality and increasing prices with sufficient rainfall, while excessive rainfall reduced supply which leads to increased prices.

For the trend component, the respective farmgate and retail prices of both commodities showed increasing patterns which could be attributed to the faster increase in demand than supply. The double log model indicated that technology positively influenced the secular price variations for cabbage and carrots. Since this is a contradiction to theory, the necessity of ground verification is seen.

The two commodities showed cyclical variations, with intervals of 1 to 4 years. Cabbage cycles were influenced by industry changes and natural disasters while for carrot it was due to delays in farmers' and retailers' responses to price changes. The double-log model revealed that producers' expected prices positively affected farmgate prices for both commodities. Although producers who are anticipating higher prices are encouraged to produce more, the supply still fell short of demand. Irregular variations impacted cabbage prices through smuggling, while carrots did not. This is likely because although carrots experience significant smuggling, the overall supply remains insufficient to meet the growing demand.

The factors affecting the prices of cabbage and carrots varied foremost of which are related to demand and supply. To address rising prices, there is a need to have a more efficient production through high-yielding varieties, production programming along with the use of protected cultivation technologies (e.g. greenhouses), and strengthen the enforcement of the Anti-Smuggling Act 2016. For future researchers, further research using primary data is recommended to verify existing technologies for cabbage and carrots that could improve supply especially during off-season.

Language

English

LC Subject

Vegetables -- Prices

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2023 A14 C38

Notes

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Document Type

Thesis

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