Achieving self-sufficiency in vegetable production is a critical issue in emerging economies, including the Philippines. Onions, a staple in Filipino dishes, have faced market instability owing to frequent price fluctuations. Understanding price transmission at various stages in the onion supply chain is essential for assessing market efficiency.
This study uses monthly price data from farmers, wholesalers and retailers. Three price transmission cases were examined: (1) wholesalers-farmers, (2) retailers-farmers and (3) retailers-wholesalers. Symmetric and asymmetric cases were analyzed using autoregressive distributed lag and nonlinear autoregressive distributed lag models.
The results show price symmetry between wholesalers and retailers but asymmetric price transmission from farmers to wholesalers and retailers. Retailers benefit from symmetric price signals owing to daily price-monitoring reports and government pricing policies. Farmers, constrained by onion perishability, are forced to sell to wholesalers who also serve as traders and financiers, accepting agreed-upon contract prices to avoid losses.
This analysis focused on the national domestic prices of red onions, excluding import prices. Future research could expand on this by incorporating import prices into market efficiency analysis. Additionally, exploring spatial price dynamics at provincial and regional levels would provide further insights.
This study adds to limited research on asymmetric price transmission in the Philippine onion market. It provides insights for addressing market inefficiencies in developing countries and supports the United Nations’ “Zero Hunger” sustainable development goal, particularly in promoting sustainable agricultural production and food security.
