Market Behaviour and Price-arrival Integration of Byadgi Chilli in Karnataka, India

Abstract

Byadagi chilli (Capsicum spp.), known for its deep red colour, wrinkled texture, and mild pungency, holds significant commercial value in India. Cultivated primarily in Karnataka, it is valued for its high oleoresin content, used in food, cosmetics, and pharmaceuticals. The Geographical Indication (GI) status (GI No. 129), granted in February 2011, has boosted its market value. This study analyses the market integration of Byadagi chilli across Bangalore, Hubli, and Byadgi markets using 25 years of secondary data (January 2000 to January 2025) from Karnataka Krishimaratavahini. Ex post Facto Research was conducted to study the market integration of Byadagi chilli. The study was purely based on secondary data. The data was collected for 25 years from January 2000 to January 2025. Various statistical/econometric analytical techniques were used. The ADF test results indicated that the actual price series for Bangalore and Hubli markets were non-stationary, while the Byadgi market series was stationary. After differencing, the series became stationary across all markets. Johansen's co-integration test revealed significant long-term relationships among the markets, indicating strong price linkages. The Byadgi market showed weaker adjustment, suggesting the influence of external factors or market inefficiencies. Granger causality tests demonstrated a bidirectional causality between Bangalore and Hubli markets, indicating mutual price influence. The findings suggest that strengthening market infrastructure, improving information flow, and fostering better price discovery mechanisms are critical for enhancing market efficiency and farmer profitability. Policy interventions aimed at reducing market fragmentation and improving logistical and financial support could help stabilise prices and increase farmer incomes. These insights provide valuable guidance for policymakers, traders, and stakeholders involved in the Byadgi chilli value chain.