Forecasting the Tea Production of Bangladesh: Application of ARIMA Model

Abstract

Bangladesh is the world’s 10th largest tea producer and fifteen number exporters and sixteen number consumers in the world. The consumption is increasing day by day mainly due to the rapid increase in population. The main purpose of this research is to identify the Auto-Regressive Integrated Moving Average (ARIMA) model that could be used to forecast the production of tea in Bangladesh. This study considered the published secondary data of yearly tea production in Bangladesh over the period 1972 to 2013. According to AIC, AIC_C and BIC, the most suitable model to forecast the tea productions in Bangladesh is ARIMA (0,2,1). Adequacy of the fitted model has been tested using Run test and Jarque and Bera test criteria followed by residual analysis. The comparison between the original series and forecasted series shows the same manner indicating the fitted model behaved statistically well and suitable to forecast the Tea productions in Bangladesh i.e., the models forecast well during and beyond the estimation period.

Keywords and phrases. Tea, ARIMA Model, Forecasting, Bangladesh.

2000 Mathematics Subject Classification. 62E05, 62E99