Price Fluctuation and Vertical Market Integration of Shallots in The Production Center of Central Java Indonesia

Abstract

Shallots from Brebes production center are not only distributed in that region but also to all regions in Indonesia, including Beringharjo market in Yogyakarta. Therefore, this study aims (1) to analyze price fluctuations of shallots in producer and consumer markets in Brebes and Beringharjo Yogyakarta; (2) to analyze vertical market integration in Brebes and producer markets in Brebes with consumer market in Beringharjo. The data used is weekly price of shallots in producer and consumer markets in Brebes, as well as in Beringharjo during 2015-2019. Data were analyzed using the Engle Granger cointegration model. The results showed that the price of shallots in producer and consumer markets tends to fluctuate and has the same pattern of movement. Shallot price fluctuations in producer market in Brebes are higher than consumer market in Brebes and Beringharjo Yogyakarta [9]. Shallot price fluctuations between the three markets were highest in January, February and December and lowest in May and November. In the short and long term, there is weak integration between the producer market and consumer market in Brebes. In the short term there is no integration between the producer market in Brebes and consumer market in Beringharjo Yogyakarta, but in the long term there is weak market integration.