Modeling of Tomato Prices in Ashanti Region, Ghana, Using Seasonal Autoregressive Integrated Moving Average Model

Abstract

The pricing of seasonal and perishable crops such as tomatoes is of paramount concern to emerging economies. In this paper, we have formulated a model for the prices of tomatoes in the Ashanti Region of Ghana. We applied time series on the tomatoes price data recorded over the period of 1994 to 2015, sourced from the Ministry of Food and Agriculture (MoFA) Research Directorate, Kumasi. We analyzed the data using Seasonal Autoregressive Integrated Moving Average (SARIMA) by regrouping the data into quarters for each year. Consequently, the best fitted model was found to be SARIMA (0, 1, 1)x(0,1,1). The model predicted that in 2016, the prices of tomatoes will increase with second quarter providing the highest price. However, after a huge rise in price at the second, price is expected drop in both the third and fourth quarter of 2016 all things being equal. This has been the price trend in all second quarters for the period considered in the analysis with exception of 2015 where price fell by almost GHC 5.00 compared the first quarter. We have formulated this model to assist stakeholders including government to take informed decisions and formulate pricing policies that will guarantee farmers stable price.