Price Transmission of Ofada Rice in the South-West Geo-Political Zone of Nigeria

Abstract

The study was conducted to examine price transmission of ofada rice in the south –west geo-political zone of Nigeria. Data on monthly prices of processed Ofada rice was collected from National Bureau of statistics from the period of January 2016- March 2021. Descriptive statistics was carried out to characterize the price pattern in the various States; this was done by the use of Eviews9 statistical software. The result showed that the price of ofada rice in Lagos and Ondo were stationary both at level I(0) and after first differencing I(I) while the other remaining States were stationary only after first differencing I(I). The maximum price of ofada rice was recorded in Ondo (₦900/kg) while the minimum price was recorded in Osun (₦250.11/kg). The result of the Jarque –Bera shows that the prices of Ofada rice were not normally distributed in Lagos, Ondo, and Osun State. Johansen test of co-integration was used to analyze the market co-integration and the test result shows that only 5 market links were co-integrated while the result of the granger-causality test shows that all the market links had Uni-directional price movement with 7 market links showing evidence of granger- causality. Therefore, it was recommended that there should be an efficient flow of information and good access to roads as these will help to improve market performance, and the activities of market intermediaries should be minimized.