Modeling annual Coffee production in Ghana using ARIMA time series Model

Abstract

In the international commodity trade, coffee, which represents the world’s most valuable tropical agricultural commodity, comes next to oil. Indeed, it is estimated that about 40 million people in the major producing countries in Africa derive their livelihood from coffee, with Africa accounting for about 12 per cent of global production. The paper applied Autoregressive Integrated Moving Average (ARIMA) time series model to study the behavior of Ghana’s annual coffee production as well as make five years forecasts. Annual coffee production data from 1990 to 2010 was obtained from Ghana cocoa board and analyzed using ARIMA. The results showed that in general, the trend of Ghana’s total coffee production follows an upward and downward movement. T he best model arrived at on the basis of various diagnostics, selection and an evaluation criterion was ARIMA (0,3,1). Finally, the forecast figures base on Box- Jenkins method showed that Ghana’s annual coffee production will decrease continuously in the next five (5) years, all things being equal