Market Integration: A Study of Sorghum Prices in Western India
1967
Lele, Uma J.
This article examines the popular view in underdeveloped countries that there exist large regional price differences that are caused by speculative elements in trade. The data bearing on the prices of sorghum in a number of primary and terminal markets in India suggest that these differences are not caused by the activities of the traders. The analysis emphasizes the high degree of interdependence between wholesale markets in the process of price formation. Regional price differences often result from differences in varieties of the grain traded. Prices for the same product may differ because of transport costs. Price discrepancies of the order larger than transport costs may result from such factors as transport bottlenecks and government control on the movement of goods.
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