Dynamics of co-integration and forecasting models in the tea markets

The study analyses the dynamics of tea prices in Guwahati, Kolkata, Mumbai, Delhi, Colombo, and Mombasa markets. The descriptive statistics reveal a promising growth rate in all the domestic markets, despite of wider price range. The markets are well associated in the short run, whereas Johnson’s co-integration test indicates zero co-integrating vectors. The lack of integration implies an absence of strength and stability of price linkages in the tea markets, which should be corrected by improvising transparency and flow of information in tea markets. For forecasting, EEMD-ARIMA is found best fit and thus suggested to use for forecasting the tea prices.