Richard Kwasi Bannor, Mada Melkamu
This study explored modelling and forecasting of wholesale cluster beans (guar) monthly prices in Sri Ganganagar district of Rajasthan using Autoregressive Fractionally Integrated Moving-Average Model (ARFIMA). Descriptive statistics of the price series (2003-2015) shows maximum price of cluster beans recorded in Sri Ganganagar market was at price of ₹27431.00 in April 2012. Coefficient of variation indicates cluster beans (guar) prices in Sri Ganganagar highly volatile represented by value of 118.82 percent. The results show that, the compound rate growth of prices is about 3.38 percent per month which is higher than instantaneous growth rate of 1.45 percent. Furthermore, prices of cluster beans are are very high in the month of April. Similarly the month of March, May and December records high prices in the year using the price seasonality indices.  Based on the minimum AIC and BIC values, ARFIMA (1/2, 0.309, 1) was selected as the best fit model for forecasting of cluster bean prices. The mean absolute percentage error from the ARFIMA (½, 0.309, 1) forecasting from January 2003 to May 2015 is 12.27 percent. On the other hand, the mean absolute percentage error of ARFIMA (½, 0.309, 1) based on prediction from December 2014 to May 2015 is 7.049%. Out of sample forecasted cluster bean prices in the coming months of 2015 in Sri Ganganagar (from June to December 2015) has also been presented.
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