India is a land of spices which has to play an important role in global market. The volume of export has mainly influenced by the factors like production of commodity, domestic consumption, international demand, domestic and international prices and their fluctuations. Among above factors the fluctuation in (both the short and long-run behavour) of international price has important implications on trade, domestic production and export revenue. An understanding of the pattern of volatility of major spices exports could provide some guidelines to policymakers, commodity producers and traders. This paper is made an attempt to empirically examine persistence and asymmetry in volatility of international prices of spices through GARCH I model and its effect on exports by using time series data for the period between 2001-02 and 2007-08. The empirical results reveal that volatility of international prices of selected spices generally tends to fluctuate over time and there is an evidence of long-term persistence and volatility clustering in prices.
