An Analysis of market cycle for Thai cassava chips

Abstract

This dissertation aims to examine the factors affecting the supply and demand for Thai cassava chips, to explore the regime-switching magnitude effects of supply and demand on Thai cassava chips, and to clarify the market cycle for Thai cassava chips by using the Markov Regime Switching model to analyze. The data for this study are monthly time series data from January 2009 to December 2019. The data are divided into 2 parts, consisting of demand and supply. Demand consists of the quantity of demand for cassava chips, the F.O.B. price of cassava chips in the previous month, the price of substitution goods (maize), and the GDP per capita of China. The supply consists of the quantity of total production of cassava chips in Thailand, the F.O.B. price of cassava chips in the previous month, the planting area of cassava, the amount of rainfall, the yield of cassava root in the previous month, and the price of cassava root in the previous month. The results of the linear regression model show that the F.O.B. price of cassava chips in the previous month and the price of substitution impact the demand for Thai cassava chips in the opposite and the same direction, respectively. In case of the regime- switching, the studies found that the factor determining the demand for Thai cassava chips in the downward market situation is the price of substitution goods (maize). The F.O.B. price of cassava chips in the previous month is the determining factor in an upward market situation. The demand for Thai cassava chips is mostly an upward market situation at around 42.583 months, and then it will switch to a downward market situation. The results of the linear regression model show that the amount of rainfall impacts the supply of Thai cassava chips in the opposite direction. In case of the regime-switching, the factor determining the supply of Thai cassava chips in the downward market situation is the amount of rainfall. The amount of rainfall and the yield of cassava roots in the previous month are the determining factors in an upward market. The supply of Thai cassava chips is mostly a downward market situation at around 5.791 months, and then it will switch to an upward market situation. Furthermore, the result effectively clarifies the business cycle. ทมยนฺติ As a result of this study, I suggested that the government should have an agency to advise farmers on steps and methods to reduce the production cost, which to compete in price with maize. Furthermore, the government should develop irrigation and water management systems to cover all areas in order to increase cassava production.