Efficiency of the plantain marketing system in Ghana: A co-integration analysis

Abstract

The study assesses the efficiency of the plantain marketing system in Ghana using monthly wholesale prices in GHS/10 kg covering the period 2004 to 2009. The integration among the plantain markets was tested with the Johansen multivariate co-integration analysis and error correction model. The markets chosen for the study are Accra market as a central consumption market; Kumasi market, Sunyani market and Koforidua market as assembling markets; Goaso market, Begoro market and Obogo market as producing markets. These markets were chosen based on the volume of production and trade in the areas. The findings of the market integration analysis indicate that arbitrage in the plantain marketing system is working since there are both long and short run relationship between Accra market (central consumption market) and the three assembling and three producing markets. However, the speed with which prices are transmitted between Accra market (consumption market) and the other markets (plantain production and assembling markets) is relatively weak at 27.7%, compared to perfect adjustment of 100% threshold. This implies that there is the need for further integration especially in the short run. Improvement in market information systems and expansion especially into producing areas, as well as accurate, timely, and availability of information on plantain prices may be useful in the efficient distribution of plantain from surplus to deficit markets.