Market integration and price transmission of sorghum in India

Sorghum is one of the major coarse cereals grown worldwide, particularly in semi-arid and rainfed regions, serving as an important source of food, fodder, and biofuel, and providing livelihood support to millions of small and marginal farmers. This study examines the long-run spatial integration and short-run price transmission among five major sorghum producing states in India viz., Maharashtra, Karnataka, Rajasthan, Uttar Pradesh and Tamil Nadu by adopting a set of time-series econometric tools, viz., Augmented Dickey–Fuller (ADF) test, Phillips–Perron (PP) test, Johansen’s multivariate co-integration test, Vector Error Correction Model (VECM) and Granger causality test. The data used for the study were from January 2010 to October 2025. The findings from unit-root tests confirmed that all the price series were non-stationary at their levels but became stationary after first differencing, which justified the use of the Johansen co-integration approach. The co-integration shows that strong long-run equilibrium linkage across the major sorghum markets in India. The VECM suggests that Karnataka and Uttar Pradesh bear the main burden of restoring the long-run equilibrium. Granger causality test revealed that bidirectional flow of price is seen between Karnataka and Maharashtra, Rajasthan and Uttar Pradesh, and Uttar Pradesh and Rajasthan states. Maharashtra often leads in setting prices that Rajasthan follows. Tamil Nadu appeared relatively weak in short-run linkages with the rest of the states. However, the study faces challenges related to data limitations and unobserved factors such as policy interventions, transport bottlenecks which may influence the robustness of the estimated market integration and price transmission relationships. Overall, the findings revealed that an efficiently integrated sorghum market system in India with a few dominant and fast-adjusting markets that ensure the dissemination of price signals across regions.