Price forecasting for selected up country vegetables of Sri Lanka : an application of time series analysis

Abstract

Vegetables are substantially contributing in meeting dietary needs of rising population in Sri Lanka. Vegetables are very important in our life, as they are helping to maintain human’s health by offering vitamins, minerals and fibers etc. Because having vegetables in human’s daily life reduces the risk for diseases and helps to live healthy life. The vegetable industry in Sri Lanka has developed a lot during the past few decades. For example, nowadays vegetable growers and sellers use modern technologies other than past years. Now, growers can get ongoing vegetable price lists of the major supermarket chains of Sri Lanka through internet and can obtain wholesale prices for their products and sell their products through "Govipola” mobile application and "Govipola.lk" website developed by Croptronix Private Limited in Sri Lanka but they do not have a method to know about the vegetable prices of the future months. Sri Lanka has two types of vegetable categories Up-Country and Lower country. Up-Country vegetable cultivation is mostly done among the farmers in Badulla and Nuwara-Eliva districts of Sri Lanka. Cabbage, Leeks, Beetroot, Carrot, Potato and Beans are the major vegetable crops cultivated in Up-Country ((M.T. Padmajani, 2014)). This study was mainly focused on Up-Country vegetables. Prices of Up-Country vegetables reached a peak in 2019, whereas the prices of some vegetables had faced a sudden drop along with some vegetable prices falling below cost price because of the COVID19 virus pandemic which began affecting Sri Lanka around March, 2020. The high variability in vegetable prices not only affects the normal consuming demands of urban residents, but also exacerbates the market risk for the farmers and dealers. Factors affecting vegetables price come into play across various phases, from the farm to the dining table, like production, purchase, transportation, wholesale, retailing, consumption, and so forth. Therefore, it is necessary to clarify the key factors that affect the fluctuations of vegetable prices and to build an accurate early-warning system for vegetable prices, to help in decision making for corresponding government departments, producers and operators. Before building an early-warning system for price, related parties need future weather details because weather directly affects the price of the vegetable. Finally, targeted policy recommendations could be proposed to stabilize the fluctuation of vegetables prices by forecasting the price of the vegetable. In this study, the past rainfall information in Millimeters and past temperature information in Celsius are used as key factors. Most of the vegetable prices are depend on the weather conditions of the area. As an example, if farming area gets a massive amount of rain the vegetable prices will be going up instantly. And. if farming area gets the right amount of rainfall and right amount of temperature the vegetable prices will stay in average state. (Salgueiro and Tarrazon-Rodon (2021))This study focused on forecasting the price of Up-Country vegetables by using the past rainfall and temperature information of the Nuwara Eliva district.