Abstract:
Sri Lankan per capita consumption of potato is about 5.43kg/yr while production
and extent were 51933 t/yr and 3844 ha in 2010 respectively (Department of Census
and Statistics, 2010). The local potato production could not meet this demand and
hence a fair percentage of the total requirement has been imported every year to
avoid high price fluctuation in wholesale and retail markets of potato. This situation
together with the perishable nature and the lack of infrastructure facilities, mainly
storage facilities can be attributed to low bargaining power of farmers. Hence the
objective of the present study was to develop quantitative models for forecasting
potato retail and wholesale prices in Sri Lanka by using the Box-Jenkins (ARIMA)
methodology. Data necessary for analysis were collected from Hector
Kobbakaduwa Agrarian Research and Training Institute for the period of 55 months
from January 2007 to June 2011. The results of forecasting were as follows: Best
model which can be applied to forecast potato retail price is ARIMA (2,0,1)(1,1,0)i2
and for potato whole sale price is ARIMA(2,1,1) (0,1,0)i2 with Mean Absolute
Percentage Error (MAPE) 5.49% and 11.79% respectively. These models can be
used by decision makers for effective decision making and by other responsible
officers to make farmers and wholesalers known about future prices of potato and
thereby to increase the bargaining power of farmers. Further, it will facilitate
farmers to decide the land area to be cultivated with potato in the relevant season.
