Application of Sarima Model in Cardamom (Large) Price Forecast in Gangtok Market
Purpose – The price behaviour of a commodity plays crucial role in farm level crop production planning. Therefore, this
paper mainly intends to forecast the monthly Cardamom (Large) price for the period of August 2015 to July 2017 using
statistical time-series modelling techniques.
Methodology – Box-Jenkins Seasonal Autoregressive Integrated Moving Average (SARIMA) was employed to analyse
domestic monthly wholesale Cardamom (Large) Price data in Gangtok Market from April 2011 to July 2016. The
forecasting performance of these models have been evaluated and compared by using common criteria such as: mean square
error MSE, mean absolute percentage error MAPE, root mean square error RMSE, tracking signal TS, Akaike Information
Criteria (AIC) and Schwarz's Bayesian Information criterion (SBC). MAD.
Findings – By working on stata 13, a seasonal ARIMA (p,d,q) (P,D,Q)12 model is constructed based on autocorrelation and
partial autocorrelation. Finally, forecasts were made based on the model developed. On validation of the forecasts from these
models, Seasonal ARIMA (1, 1, 1) (0, 1,1)12 model performed better than the others for cardamom prices in Gangtok
market. The validation percentage ranged between 92 to 116 per cent from August 2015 to July 2016. The forecast results
did not reveal any specific pattern in the cardamom prices.
Originality/value – The author has developed a SARIMA model. Thus, SARIMA model can be used to predict the future
price of cardamom in Gangtok Market of Sikkim State.
Keywords - Large Cardamom; Price Forecast; Gangtok; Sikkim; SARIMA model;