Economic Forecasting Of Market Supply Of Karkadeh Crop In Sudan (A Case Study Of El Obeid Karkadeh Crop Market)

Abstract

The main objective of this study was to understand the behavior of the existing marketing system, structure, and forecasting of quantities and prices of karkadeh in El Obeid Crops Market. The Box-Jenkins Autoregressive Integrated Moving Average (ARIMA) model of time series analysis was used, which analyzes the trend of prices and quantities in the market through the estimation of the auto regressive integrated moving average. The specific objectives were to identify the temporal behavior and determining of the adequate forecast models of karkadeh as a case study. The study depended on interviews with a number of local karkadeh traders, merchants, and agents of exporting and marketing companies during the season 2005. The study also depended on monthly time series secondary data for the supplied and stocks quantities and prices of karkadeh crop obtained from El Obeid Crops Market covering the period January 1997 to December 2005. ARIMA model results indicated that the time series of total quantities of karkadeh (supplied and stock) have been stable on average throughout the period of January 1997- December 2005. It was indicated that the low supplied and stock quantities of karkadeh during June to September tended to increase gradually during harvest months of November-January. The results also indicated that the time series of stock and supplied quantities to El Obeid Crops Market have been positively correlated to the exported values and quantities of karkadeh. The data of karkadeh stock and supplied quantity gave forecasting results for one year only. The time series of karkadeh prices had been non-stationary, and ARIMA models of prices did not give any forecast. In addition, the causality test of time series illustrated absence of relationship between the prices and total supplied and stock quantities, which reflected the normal supply and demand conditions of karkadeh in El Obeid Crops Market. The study indicated a number of market structure and functions constrained marketing of karkadeh in El Obeid market and karkadeh trade of Sudan. These included: few traders dealing with karkadeh buying, stringent rules and procedures in addition to high taxes and fees hindering easy entry into the market, harvest and post harvest losses, cleaning, handling, packing, transportation system, lack of market information, poor storage facilities and poor external promotion for export. The study concluded that ARIMA model could help policy decision-makers, traders, economists to arrive at short term forecasting of marketing karkadeh. The study recommended revising the market structure of karkadeh crop trade in El Obeid Market. Specifically it recommended revising of rules, licenses and regulations for entering the auction and allows for free entry, and support establishment of marketing associations of Karkadeh to avoid undesirable price and bidding conglomerations. The study also recommended supporting of agricultural and marketing extension services to advice local traders, merchants, and exporters on measures for improving crop harvesting, promotion of marketing services and information of karkadeh.