AN ANALYSIS OF RICE PRICE IN MYMENSING TOWN MARKET: PATTERN AND FORECASTING

Abstract

The paper investigates the trend, seasonal and cyclic al variations of retail and wholesale prices of price in Mymensingh town market and forecasts the future prices based on ARIMA model. Compound growth rates of real prices indicate that consumers seem to he better off with respect to rice price since independence, particularly during 80's. Seasonal price variation of fine rice is found to be higher compared with coarse rice because of continuous flow of coarse rice in the market. Peak price month has changed to April from September and seasonal price variation has reduced markedly due to higher production of Boro paddy. Apart from seasonal cycles, there exist a five year cycle in rice price as revealed by the harmonic analysis. As the structure of rice price has changed since independence, the forecasting of prices based on ARIMA model for the whole period provides poor performance. However, the forecasting of prices improves considerably when the study period is reduced. Thus, it may be concluded that ARIMA model can be used to forecast short term rice price in Bangladesh.