Price Relationship of Horticultural Commodities amongst Markets in North Sumatera Province, Indonesia

Abstract

Price differences in various regions are one of the factors causing the phenomenon of price fluctuations which trigger inflation. Changes in the price of a commodity may cause changes in the price of substitute or complementary goods. This research aims to determine the price relationship between horticultural commodities that occurs in several cities in North Sumatra. The research was carried out in five cities in North Sumatra, including the cities of Gunungsitoli, Medan, Padang Sidempuan, Pematang Siantar and Sibolga. Secondary data in the form of weekly price data for onion, garlic, red chili and cayenne pepper commodities was obtained from the National Strategic Food Price Information Center for the period January 2021 – February 2023. The Granger Causality Test is used to determine the reciprocal relationship between prices between commodities and markets. The results show that the shallot commodity is one commodity that has an influence on other commodities. If we look at the influence of commodities between cities, the shallot commodities in the cities of Medan, Pematang Siantar and Gunungsitoli have an influence on the price of shallots in other cities. Meanwhile, for garlic commodities, the city of Padang Sidempuan influences market prices in other areas. The city of Medan is an important market for red chili commodities, mainly related to the price offered.