Modeling and Forecasting the Conditional Prices of Tomato in Distrcit Hyderabad
Keeping in view the growing demand of modeling the conditional moments of a distribution, the present study is an attempt to model and forecast the conditional mean prices of the tomato crop in the district Hyderabad by using the sophisticated statistical models such as ARIMA(p,d,q) and SARIMA(p,d,q)(P,D,Q)s. The weekly prices of the tomato were downloaded from an official website of Sindh Agricultural Marketing Department. The suitability of the data set for time series analysis was checked through Durbin-Watson test and after finding the suitability, the same was checked for stationarity though AFD test. Original prices were found non-stationary while their first difference made them stationary. The differenced prices were then modeled by applying Box-Jenkins methodology. Seasonality in the prices was detected at every 32 weeks through autocorrelation and partial autocorrelation functions (ACFs and PACFs). Different specifications of seasonal ARIMA i.e., SARIMA(p,d,q)(P,D,Q)s models were used and based on the AIC and BIC and the white noise property of the residuals, SARIMA(1,1,1)(1,1,1)32 was selected as the best model. The future prices of the tomato were forecasted using the same model. It was concluded that the prices of tomato have great variability i.e., least prices were found in winter (October) while the highest prices were recorded in April. It was also observed that the forecast errors from SARIMA(1,1,1)(1,1,1)32 model were of very small magnitude as compared to the other candidates model. The comparison of the forecasted with the real prices shows that our selected model has upward bias of little magnitude that can be easily neglected. However, on overall basis, our selected model performs well in terms of forecasting and can be used to forecast the future prices of tomatoes in the selected study area. Based on the findings of the present study it is recommended many growers who want to take advantage from increases in tomato prices in April should focus on their production during this month. In terms of the sustainability of tomato production to control the price variations, considering consumers requests under good agricultural practices, the production which is qualified and proper to the food safety carries importance. Due to increase in consumption in the country and expansion towards new international markets, it is recommended that the tomato producers produce proper to the good agricultural practices.