ABSTRACT
Tea production is the mainstay of many people in Kenya. The contribution of tea sector
to the Kenyan economy is enormous as it accounts for about 4% of Gross Domestic
Product (GDP). Favourable product prices act as a trigger for any commercial activity
over time and also suggest sustainability of the activity. Tea is a very significant crop
in Kenya and it is one of the major agricultural exports of the country. However, the
industry has experienced many challenges such as stiff competition from other tea producing
countries like Sri-Lanka, unfavourable climatic changes, land competition from
other crops like sugar cane just to mention a few. These challenges have caused seasonal
variation in tea pricing at the Mombasa tea auction which is the second largest black tea
auction center in the world after Colombo in Sri-Lanka. There exist plethora of studies to
justify that a careful and precise selection of Auto-regressive Integrated Moving Average
(ARIMA) model can be fitted to time series data to forecast with better accuracy the future
prices of tea auction. We have used time series ARIMA model to forecast tea pricing
at Mombasa tea auction in Kenya. The general objective of this project is to study the
trend and seasonality, and to forecast future tea prices. Monthly pricing data between
1995-2018 from International Tea Committee; African tea brokers limited was used for
model validation. To identify the best ARIMA model R statistical software was used to
analyse the tea pricing data. ARIMA (1, 1, 2) with Akaike Information criterion (AIC)
and Bayesian information criterion in table 4.1. The model was then used to predict tea
prices from 2019-2023 as shown in table 4.13.
OKUMU, O (2021). Application Of Auto-Regression Integrated Moving Avaerage Model To Forecast Tea Prices At Mombasa Tea Auction Center In Kenya. Afribary. Retrieved from https://track.afribary.com/works/application-of-auto-regression-integrated-moving-avaerage-model-to-forecast-tea-prices-at-mombasa-tea-auction-center-in-kenya
OKUMU, ODDAH "Application Of Auto-Regression Integrated Moving Avaerage Model To Forecast Tea Prices At Mombasa Tea Auction Center In Kenya" Afribary. Afribary, 06 May. 2021, https://track.afribary.com/works/application-of-auto-regression-integrated-moving-avaerage-model-to-forecast-tea-prices-at-mombasa-tea-auction-center-in-kenya. Accessed 23 Nov. 2024.
OKUMU, ODDAH . "Application Of Auto-Regression Integrated Moving Avaerage Model To Forecast Tea Prices At Mombasa Tea Auction Center In Kenya". Afribary, Afribary, 06 May. 2021. Web. 23 Nov. 2024. < https://track.afribary.com/works/application-of-auto-regression-integrated-moving-avaerage-model-to-forecast-tea-prices-at-mombasa-tea-auction-center-in-kenya >.
OKUMU, ODDAH . "Application Of Auto-Regression Integrated Moving Avaerage Model To Forecast Tea Prices At Mombasa Tea Auction Center In Kenya" Afribary (2021). Accessed November 23, 2024. https://track.afribary.com/works/application-of-auto-regression-integrated-moving-avaerage-model-to-forecast-tea-prices-at-mombasa-tea-auction-center-in-kenya