An empirical study on forecasting the price of groundnut in Tamil Nadu

Groundnut (Arachis hypogaea L.) or more popularly referred to as peanut, occupies a central role amongst the globe’s leading oilseed crops and India is one of the main producers. This research investigates the trends of groundnut farming, area, production and productivity in India and Tamil Nadu from 2005 to 2024. The purpose is to assess the volatility in groundnut farming and patterns of prices using statistical analysis like Cuddy-Della Valle Instability Index (CDVI), seasonal price index and Auto-Regressive Integrated Moving Average (ARIMA) model for forecasting prices. The findings indicate that the area under groundnut cultivation in India has decreased slightly, while production has remained steady and productivity has increased. This steadiness has factors like better seed varieties, improved agronomic methods and government support. In Tamil Nadu, though there was some reduction in area on account of drought and water shortages in certain places, such as Villupuram and Thiruvannamalai, there was an increase in production as a result of improved irrigation and cultivation methods. The time series and descriptive methods are employed to determine evident trends in production and price fluctuations. The Compound Annual Growth Rate (CAGR) methodology illustrates a moderate increase in production in spite of the decline in area, while the CDVI detects some instability at the times of droughts. The seasonal price index indicates that the prices go through a typical pattern, peaking in December due to a shortage of supply before the new harvest. ARIMA forecasting models demonstrate a satisfactory level of accuracy for the selected markets, which is a reliable tool for price prediction. The results reveal a valuable insight for farmers, traders and policymakers to take informed decisions regarding the production planning, strategies of storage and interventions in the market for the sustainable groundnut cultivation and to enhance the efficiency.