Exogenous variable driven deep learning models for improved price forecasting of TOP crops in India

Abstract

Accurately predicting agricultural commodity prices is crucial for India's economy. Traditional parametric models struggle with stringent assumptions, while machine learning (ML) approaches, though data-driven, lack automatic feature extraction. Deep learning (DL) models, with advanced feature extraction and predictive abilities, offer a promising solution. However, their application to agricultural price data ignored the exogenous factors. Hence, the study explored advanced versions of the well-known univariate models, NBEATSX and TransformerX. The research employed price data for essential crops like Tomato, Onion, and Potato (TOP) from major Indian markets and complemented it with corresponding weather data (precipitation and temperature). To provide a comprehensive analysis, the study also evaluated traditional statistical methods (ARIMAX and MLR) and a suite of ML algorithms (ANN, SVR, RFR, and XGBoost). The performance of these models was rigorously evaluated using error metrics like RMSE, MAE, sMAPE, MASE and QL. The findings were significant indicating DL models, particularly when augmented with exogenous variables, consistently outshone other methods with NBEATSX and TransformerX showing an average RMSE of 110.33 and 135.33, MAE of 60.08 and 74.92, sMAPE of 22.14 and 24.00, MASE of 1.02 and 1.32 and QL of 30.04 and 34.07, respectively. They exhibited lower error metrics, as compare to the statistical and ML models underscoring their effectiveness and potential in agricultural crop price forecasting. This study not only bridged a crucial research gap but also highlighted the robust potential of DL models in enhancing the accuracy of agricultural commodity price predictions in India.