RA 00048.pdf - OAR@ICRISAT

Seasonal Price Variation of S o r g h u m
A study of m o n t h l y prices for t h e years 1 9 7 0 - 7 6
s h o w s that seasonal price variation has a peak in
S e p t e m b e r and a l o w in t h e m o n t h s of February
and M a r c h . The increase f r o m t h e l o w e s t to t h e
highest is about 1 6 % in 6 m o n t h s . Thus t h e price
increase is about 2 . 6 % / m o n t h . Interestingly, t h e
market arrivals of s o r g h u m are 3 3 % of t h e total
annual arrivals (average of 1 9 7 0 - 7 6 ) in January
- M a r c h and only 1 8 % in J u l y - S e p t e m b e r (Fig. 4).
Regional Price Variation
M a p p i n g of s o r g h u m prices, by district in four
states, s h o w s s o m e interesting regional patterns.
During 1 9 5 7 - 6 4 there is not m u c h price variation
in s orghum b e t w e e n the districts in the four
states, although prices for s o r g h u m in northern
Karnataka t e n d to be the highest, w h i l e those in
central Madhya Pradesh are the l o w e s t (Fig. 5).
H o w e v e r , f r o m 1965 to 1973, s o r g h u m prices in
Karnataka attained considerably higher levels than
M a d h y a Pradesh, Andhra Pradesh, and Tamil
Nadu (Fig. 6). Restrictions in interregional trade as
w e l l as other f o o d policies are responsible for this
differentiation of sorghum prices. A f t e r the gradual
lifting of these restrictions f r o m 1977 o n ­
w a r d , the original picture of relatively minor price
variation for s orghum across Indian districts is
likely to have reestablished itself.
E l a s t i c i t i e s
In India, producers and consumers of s o r g h u m
respond to changes in prices. This is m e a s u r e d in
t h e f o r m of elasticities, i.e., the percent change in
quantities supplied o r d e m a n d e d given a 1 %
change in price or income.
D e m a n d Elasticities
There are no estimates of t h e elasticities of
d e m a n d for s o r g h u m per se; h o w e v e r , since
s o r g h u m represents t h e largest share in t h e group
of "other cereals" (which together w i t h rice a n d
w h e a t constitute all cereals in India), t h e elasticities
m e a s u r e d by Radhakrishna a n d M u r t y (1980)
for this group of products reflect largely t h e case
of s o r g h u m (Table 7).
The estimates s h o w revealing differences bet
w e e n urban and rural c o n s u m e r s , especially in
6 6 5