Analysis of Indonesian and Chinese Garlic Volatility Prices

Abstract

The need for garlic consumption in Indonesia tends to increase without being matched by increased production, which causes Indonesia to import garlic by 95 percent of total domestic needs. Garlic imports tend to increase, causing the price of local garlic to be higher than the price of imported garlic, so consumers prefer imported garlic products over local garlic products. This causes farmers to face the risk of uncertainty (unpredictable) on prices, where price fluctuations are difficult to predict. In order to cope with price fluctuations and to maintain food price stability that remains accessible to consumers, it is necessary to conduct research on the analysis of the price volatility of garlic, so that price uncertainty can be overcome. This study aims to analyze price volatility in the garlic market in Indonesia and China using time series price data between January 2012 and September 2019. The method used is the ARCH/GARCH model. The results showed price volatility at producer level, imported garlic retailers, and the world market (China).