This study was conducted to analyze fluctuating vegetable price patterns and factors. This study aimed to identify time series fluctuation features including trends and seasonality of each vegetable item, and to investigate the factors of fluctuating supply and demand.
Fluctuating vegetable prices were analyzed by means of a method of using fluctuation indicators and a method of estimating and examining time series models. APC(average percentage of change) and CV(coefficient of variation) were used as indicators for showing fluctuating prices. ARIMA and GARCH were applied as time series models.
Major items for analysis in this study were napa cabbage, onion, green onion, and green chilli. In addition to the major items, an analysis was given of white radish, dried chilli and garlic. The unit prices were obtained by dividing the daily amount of transactions for each item in Garak-Dong Agricultural and Marine Products Wholesale Market in Seoul operated by Seoul Agricultural & Marine Products Corporation by a trading volume as price data for analysis. The unit prices were used to take monthly and 10-day averages for the analysis. All prices were substantialized as producer price indices.
The analysis revealed an insignificant trend but an obvious seasonality of vegetable prices. Unlike the trend of nominal prices, the real standard vegetable prices (index) do not show obvious trends. In indicator analysis, some items seemed to have a trend but the result of time series model estimation showed an insignificant trend. Vegetable prices tend to be high between seasons while they tend to be low during summer with more supply than demand. Napa cabbage price is the highest in September and the lowest in June when field-cultivated spring napa cabbage is available in the market. green onion price is the highest in September and is low in June and August when green onion is harvested. Onion price is high in February and November and low in May, June and July when onion is harvested. Dried chilli price is the highest in February and the lowest in August.
Examination of monthly fluctuation for the monthly average price of vegetables covered in this study revealed 103.8% for napa cabbage, 237.4% for green chilli (the highest), 82.9% for onion, and 63.7% for green onion (the lowest). Unlike vegetables that are cultivated in unprotected fields, such as green onion and onion, green chilli is cultivated in protected facilities. Green chilli supply prices greatly vary with seasons depending on cultivation in unprotected fields or in protected facilities with heaters.
The total fluctuation of vegetable prices of leafy and root vegetables like napa cabbage and vegetables cultivated in protected facilities like green chilli is high while that of spice vegetables like onion is low. The monthly average fluctuation was 7.96% for napa cabbage and 7.78% for green chilli. The CV was 0.46 for napa cabbage and 0.53 for green chilli. The deviation against average fluctuation over the whole period was about 50%. This result may be contributed by the fact that there are a plurality of cropping periods (cropping seasons) annually for leafy and root vegetables and vegetables cultivated in protected facilities while the cropping patterns are not diversified for spice vegetables like onion.
The year-to-year monthly fluctuation level is high for leafy and root vegetables including napa cabbage (the highest), green onion, and green chilli (the lowest), and low for the vegetables cultivated in protected facilities. Napa cabbage and green onion which have high monthly fluctuations in a year show much higher year-to-year fluctuation in a certain month, for example, October, than other items. For instance, the average year-to-year fluctuation for the napa cabbage price is 30.8%, the highest in October, and for green chilli price fluctuation 15.5%, the highest in December. This implies that napa cabbage price fluctuation approximately doubles the green chilli price fluctuation.
The monthly year-to-year price fluctuation level for napa cabbage and green onion is high in October which is the time just before and of the early stage of major harvest, and that of onion is high in April which is the time just before and of the early stage of harvesting early maturing green onion varieties. The level of green chilli is high in December which is winter. Summer is the season of the low year-to-year vegetable price fluctuation, for example, June, July and August. For example, the year-to-year fluctuation of napa cabbage in October is 30.8% which is almost a triple 9.4% in August.
Fluctuations in comparison with those in the last month and monthly year-to-year fluctuations (in comparison with those in the last year) showed similar seasonal patterns. They are especially similar with respect to high fluctuation periods. For napa cabbage, a period which has a low fluctuation in comparison with the value in the last month is January to April when the winter napa cabbage variety is available in the market. For onion, a period which has a low fluctuation in comparison with the value in the last month is September to December when harvested onion is available in the market. For green chilli, a period which has a low fluctuation in comparison with the value in the last month is between summer and autumn.
The mid and long term trend with respect to fluctuating vegetable prices is not obvious. According to estimation with the ARIMA model, napa cabbage showed a very slow decline but showed an increase since 2010 (mixed trend according to index analysis). Heteroscedasticity that means fluctuation (deviation) is concentrated, that is, concentrated fluctuation, is not obvious, with respect to the 10-day prices. Heteroscedasticity is found in onion prices and price fluctuations thereof.
Analysis of a contribution of supply and demand factors to fluctuating vegetable prices revealed that fluctuating prices (deviation) of most vegetable items were affected directly by supply and demand factors including production, demand and import and indirectly by cross effects between factors to the extent greater than a given value. It seems that both the direct and the indirect (cross) effects have an impact on fluctuating vegetable prices, but it was analyzed that the direct effect is more significant than the indirect (cross) effect.
It was shown that the factor of demand has a greater impact on fluctuating napa cabbage and white radish prices in winter and spring while the factor of production has a greater impact on fluctuating napa cabbage and white radish prices in summer and autumn. This implies that major fluctuation factors vary with seasons. With respect to the fluctuating prices of spice vegetables such as green onion, garlic and chilli, it was shown that the factor of production has a greater impact than the factor of demand or import. With respect to onion and green chilli cultivated in protected facilities, the factor of production was similar to the factor of demand.
The factor of import does not have a great impact on fluctuating vegetable prices. However, the factor of import has a significant impact on fluctuating chilli and garlic prices. The factor of import has an impact on fluctuating napa cabbage prices only in summer.
The impact of each factor in each year has been similar with respect to napa cabbage, green onion, chilli and green chilli, but the impact has increased in 2000 (in the second half of 2000) with respect to white radish, onion, and garlic.
The findings of this study are as follows. First, because seasonality of vegetable price levels (average) is obvious, it is necessary to use the result to predict prices and examine price levels.
Second, since fluctuating vegetable price levels vary with features of items, it should be considered and used as a standard for examining fluctuation. Since the deviation of seasonal fluctuation is about 50% and seasonality is obvious, this should also be considered. Since the degree of fluctuation (fluctuation level) varies with items or seasons, it should be considered to examine fluctuating prices of applicable items and periods. For example, total price fluctuations of napa cabbage and green chilli are similar but the annual fluctuation in a certain month for napa cabbage is a double the fluctuation of green chilli. Total fluctuations of green onion and onion are smaller than that of green chilli but fluctuations in a certain month for green onion and onion are greater than that of green chilli. Therefore, it is desirable to develop a stabilization scheme that annual fluctuation is decreased for spice vegetables; the seasonal deviation is decreased for vegetables cultivated in protected facilities such as green chilli; and both annual and seasonal fluctuations are decreased for leafy and root vegetables.
Third, napa cabbage and green chilli prices have fluctuated more than in previous years since 2010, and it is thus necessary to closely analyze the pattern and reason for the fluctuating prices and take measures.
Fourth, a main factor of fluctuating spice vegetable prices is revealed production while the main factors of vegetables cultivated in protected facilities are production and supply. This suggests that measures for stabilized supply and demand should be taken in consideration of the main fluctuation factors. The demand (measure) is more important in winter and spring while the factor (measure) of production is more important in summer and autumn for leafy and root vegetables such as napa cabbage and white radish. The factor (measure) of import is also important for garlic and chilli.
In conclusion, since fluctuating vegetable prices result from a difference in the feature of supply and demand and seasonal differences of each item, for example, between leafy and root vegetables and spice vegetables, it is thus desirable to develop stabilization schemes in consideration of items and seasonality.

Researchers: Yong-Sun Lee, Jong-Jin Kim, Su-Jeong Noh
Research period: 2012. 3. - 2012. 6.
E-mail address: yslee@krei.re.kr