VOLATILITIES AND TRENDS OF GARLIC PRICE BEFORE AND ENTERING THE COVID-19 PANDEMIC IN NTT

Abstract

Disparities and price fluctuations in archipelagos regions such as NTT province can create inter-regional garlic price volatility. The distribution pattern of garlic trading in NTT is often hampered by limited marketing infrastructure, distribution network, and asymmetric information. This study measures the spillover volatility and the trend of garlic prices between regions in the NTT domestic market. This study uses time-series data onto garlic prices in Kupang City and Maumere City. Data period, price months from July 2016 to May 2020. The volatility analysis uses the ARCH / GARCH approach and the volatility spillover uses GARCH-BEKK. Analysis of price movements observed trends in price behavior before and entering the Covid-19 pandemic using graphical analysis. The study results concluded that the volatility of garlic prices in Kupang and Maumere is relatively low. Compared to the two regions, the price volatility in Maumereh is higher than in Kupang. The same thing happened to the level of price fluctuation in Maumere which was higher than in Kupang. Price volatility movements towards / away the two regions are not related to each other because these two regions receive garlic supplies outside NTT. Several factors can be the cause, including differences in marketing infrastructure, and different transportation networks between regions, the openness of price information. Therefore, transparency of price information and improvement of distribution networks to ensure the balance of supply and demand needs to be considered by all parties, especially regulators.

Keywords

• volatility
• garlic
• covid-19 pandemic
• arch / garch
• garch-bekk