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Zeszyt 3 (49) 2018 , DOI: 10.17306/J.JARD.2018.00419

Lloyd Baiyegunhi, Stanley Sharaunga, Sphelele Dlangisa1, Nonkhululeko Ndaba

TOMATO MARKET INTEGRATION: A CASE STUDY OF THE DURBAN AND JOHANNESBURG FRESH PRODUCE MARKETS IN SOUTH AFRICA

Abstract:

In a market-driven economy, price indicators
guide and regulate production, consumption and marketing
decisions over time, form and place. Identifying the causes
of price differentials across markets is important for understanding
markets. This study analyzes the market price integration
of tomato in Durban and Johannesburg fresh produce
markets in South Africa, using secondary monthly time series
of wholesale price data for the period 2008–2012. Cointegration
was tested using the Augmented Engle-Granger (AEG)
test, while the direction of causality between Johannesburg
and Durban prices was tested using the error correction model
(ECM). The results showed that the two markets were integrated.
Furthermore, the results also revealed that following
a shock to the market that causes disequilibrium, economic
agents take about a month to adjust back to equilibrium; the
response to the shock is faster in the Durban market than in the
Johannesburg market. The high degree of market integration
suggests that the South African fresh produce market is quite
competitive and provides little justification for government
intervention designed to improve competitiveness or to enhance
market efficiency. Policy implications for an improved
and effective tomato marketing program were also discussed.

Keywords: market integration, fresh produce, cointegration; error correction model (ECM)

PDF in in english Full text available in english in Adobe Acrobat format:
www.jard.edu.pl/vol49/issue3/art_26.pdf
http://dx.doi.org/10.17306/J.JARD.2018.00419
For citation:

MLA Baiyegunhi, Lloyd, et al. "TOMATO MARKET INTEGRATION: A CASE STUDY OF THE DURBAN AND JOHANNESBURG FRESH PRODUCE MARKETS IN SOUTH AFRICA." J. Agribus. Rural Dev. 49.3 (2018): 239-249.
APA Lloyd Baiyegunhi, Stanley Sharaunga, Sphelele Dlangisa1, Nonkhululeko Ndaba (2018). TOMATO MARKET INTEGRATION: A CASE STUDY OF THE DURBAN AND JOHANNESBURG FRESH PRODUCE MARKETS IN SOUTH AFRICA. J. Agribus. Rural Dev. 49 (3), 239-249
ISO 690 BAIYEGUNHI, Lloyd, et al. TOMATO MARKET INTEGRATION: A CASE STUDY OF THE DURBAN AND JOHANNESBURG FRESH PRODUCE MARKETS IN SOUTH AFRICA. J. Agribus. Rural Dev., 2018, 49.3: 239-249.
Corresponding address:
Prof. Lloyd Baiyegunhi, School of Agricultural, Earth and Environmental Sciences, Discipline of Agricultural Economics, University of KwaZulu-Natal, Private Bag X01, Scottsville 3209, Pietermaritzburg, South Africa,
Authors email:
BaiyegunhiL@ukzn.ac.za

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