Market Share and Price-Setting Behaviour in Bilateral Areas: Evidence from Bambara Groundnut Markets in Nigeria

Abstract

Marketing activities within the Bambara groundnut subsector may tend to become sub-standard because of production price uncertainty and production risk which may ejaculate into inefficiency in the market. In this respect, the study analyzed market share and Price-setting Behaviour in Bilateral areas: evidence from Bambara Groundnut Markets in Nigeria. The population of the study comprised marketers of Bambara groundnut in South-east, Nigeria. Of the five states in south-east region of Nigeria, two States were chosen purposively so as to ascertain the movement of prices between the two states. This was done in order to establish fair prices comparison between the production zone and consumption zone. The choice of the two states was based on the predominance of Bambara groundnut marketers. A two-stage random sampling technique was adopted in selecting 221 respondents that was interviewed for the study. Information for this study was obtained from primary sources employing a well-structured questionnaire, oral interviews and direct observations of Bambara groundnut marketers and was analyzed using descriptive and inferential statistics. The results of multivariate analysis (ANOVA) showing the variations in price margins, marketing cost and net marketing margins showed that across the eight markets sampled within the study area, there was no vital significant distinction (F= 0.381; P=0.130, F=2.558; P=0.414 and F=1.725; P=0.217) within the price margins, costs and net margins. The velocity of rural retail prices results indicated that on the average, retail prices of Bambara groundnut was enhanced at a monthly rate of N5.586853 in the rural markets of Abia State with a standard deviation of N0.8089196. Although, the modal price alteration was N5.2300 whereas the minimum price increment was N3.6610, however, the utmost increment was N7.845 per month in the rural Bambara groundnut markets in Abia State. Similarly, for urban prices of Bambara groundnut in Abia State markets, the result showed slight variations in monthly prices. Specifically, for urban retail prices in Abia State markets, Bambara groundnut monthly prices was enhanced by N5.87178274 on the average, though, the modal and minimum values of N5.496730 and N3.847711 existed respectively. The result also showed that the rural and urban prices of Bambara groundnut changed monthly by N5.9040 and N6.2051228 respectively, per month. The result additional discovered the rural/urban retail merchant price in Enugu Abia and Enugu to be N5.72931798 with variance of N0.840113346 and N1.32771324 respectively. In relation to price velocity of wholesalers in Abia and Enugu states, wholesale price velocity of N34.471035 and N36.4364033 and standard deviation of N4.99221480 and N7.05381314, minimum of N22.59371 and N19.62524 and maximum of N 48.41510 and N 49.24824 respectively was observed. However, the results of the Analysis of Variance (ANOVA) showed that there existed significant distinction (F=4.771; P ≤ 0.05) and (F=0.048; P ≤ 4.19) between rural and urban retail price velocities in Enugu and Abia State markets, respectively. The moderately high variation of prices with time necessitates governments’ action in prices stabilization to shield farmers economically. Guarantee minimum price for producers as an incentive for assured output markets can increase supply volume and promotion of Bambara groundnut industries.