Co-integration Analysis of Market Prices of Edible Oil in Rural and Urban Markets of Niger Delta Region in Nigeria

Co-integration technique was applied to determine the level of integration between rural and urban markets’ prices of edible oil in the Niger Delta region. It also established the price causality and transmission in edible oil marketing. Primary data were generated from 432 edible oil marketers composed of wholesalers and retailers from three States in the region. Secondary data on rural and urban markets prices of palm oil and vegetable oil were sourced from the Central Bank of Nigeria (CBN) bulletin. Results of the vector error correction model (VECM) applied to measure the short-run dynamics among rural and urban edible oil markets indicate that a 1% increase in rural price of vegetable oil would in the long run increase its urban price by 4% but not same with palm oil. Estimated short-run coefficients for edible oil rural and urban markets’ prices were negative and statistically significant at the 5% level. Adjustment towards the long-run equilibrium in the short-run also revealed that the price changes in the vegetable oil rural and urban markets were transmitted to other markets at a rate of 26% and 38% respectively within a week. The direction of causality between urban and rural prices of vegetable oil showed that urban prices of the vegetable oil manifested a two-way causation with its rural price at 5% while that of palm oil was at 1% level of significance. Capacity building workshops is recommended for marketers on strategies in marketing and business conduct to help equip them on how to access price and other related market information.

本研究采用协整技术（Co-integration technique），测定尼日尔三角洲地区食用油城乡市场价格的一体化程度，并明确食用油营销中的价格因果关系与传导机制。原始数据来源于该地区三个州的432名食用油经销商（含批发商与零售商），棕榈油与植物油的城乡市场价格二手数据则取自尼日利亚中央银行（Central Bank of Nigeria, CBN）公报。向量误差修正模型（Vector Error Correction Model, VECM）用于衡量食用油城乡市场间的短期动态关系，其结果显示：农村植物油价格每上涨1%，长期内城市价格将上涨4%，但棕榈油无此效应。食用油城乡市场价格的短期系数估计值为负，且在5%统计水平上显著。短期向长期均衡的调整过程表明，植物油农村与城市市场的价格变化可在一周内分别以26%和38%的速率传导至其他市场。植物油城乡价格间的因果关系方向显示：在5%显著性水平下，二者呈双向因果关系；棕榈油的这一关系则在1%显著性水平下成立。建议为经销商开展营销战略与商业行为规范的能力建设研讨会，助力其掌握价格及相关市场信息的获取方法。