PRICE BEHAVIOR AND MARKET INTEGRATION OF SHALLOT IN JAVA
Date
2015-12Author
SUSANAWATI, SUSANAWATI
JAMHARI, JAMHARI
DARWANTO, DWIDJONO HADI
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Abstract: In Indonesia, shallot is a main seasonal vegetable crop that is always needed
by society. This condition leads to price fluctuation in producers and consumers level. The
purpose of the paper is to examine price behavior, market integration, and leading market
of shallot in Indonesia. This study uses producers and consumers monthly prices data at two
producer’s markets (Cirebon, Brebes and Nganjuk district in java) and consumer’s market
in Kramatjati Central Market, Jakarta ( KCMJ) during 2009-2013. Shallot price behavior
is analyzed by Coefficient of Variation (CV). Market integration is analyzed by Engle and
Granger model of co-integration. Granger causality test is used to identify the leading
market. Result from the study show that monthly price behavior of shallot during 2009-2013
in producers and consumers market area have the same pattern. Shallot price in producers
market is relatively more volatile than that of consumers market. Shallot price in Brebes
relatively more volatile than that of in Cirebon and Nganjuk. As much as 50% shallot market
integration in Indonesia is strong. In relationship of Nganjuk-KCMJ more integrated than
of Brebes-KCMJ.In relationship of Cirebon-KCMJ also integrated despite weak. It takes
six months to make adjustment if there is imbalance in the short-term relationship between
Nganjuk-KCMJ and seven months for Brebes-KCMJ. The producer’s markets in Cirebon,
Brebes and Nganjuk influence consumer’s market in KCMJ in determination shallot price.
Two-way relationship accur between Cirebon-KCMJ, Brebes-KCMJ and Nganjuk-KCMJ in
determination of shallot price, but in the difference lag. If price fluctuation occurred in fact,
the government might not carry out intervention, because market mechanism was able to
customized it.
Keywords: Price behavior, Coefficient of Variation, Engle-Granger Co-integration, shallot