ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Wholesaler Stocks and Hoarding in Rice Markets in India

Wholesaler Stocks and Hoarding in Rice Markets in India

This paper examines how a combination of local and marketwise uncertainties can lead to order imbalances at the level of wholesalers. Do wholesalers have a tendency to hold more than optimal inventory in response to uncertainties in the market? More importantly, is such overshooting mean reverting? Finally, why, in the context of integrated markets, should there be such hoarding on the part of the wholesalers, for integrated markets imply that information is mobile across centres, at least in the long run?

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