What's keeping the apples way? addressing the market integration issue

Abstract

Apples have been grown in India for a century. At present apple production exceeds 1.4 million tonnes a year. Still, there are wide variations in the apple prices across the country. We test the price data for market integration using cointegration and error correction methodology. Delhi, the major wholesale market for apples, does not seem to influence other markets. Mumbai market does influence Bangalore market, although with about a two week lag. Absence of integration can be attributed to traders from southern region bypassing the Delhi wholesale market, cascading effect of trader margins at various distribution points, absence of competition to agricultural produce marketing committee markets, and, inadequacy of road and cool chain infrastructure.