Analysis of integration in the wholesale maize and rice markets in Northeast, Nigeria

Abstract

The study investigated the analysis of integration in the wholesale maize and rice markets in Northeast, Nigeria. Secondary data on monthly basis for wholesale maize and rice price per kilogram obtained from National Bureau of Statistics website for period of 7 years (2017 – 2023) were used for the study. Purposive sampling techniques was used. Inferential statistics were used to analyze the data of the study. The study revealed that at first difference all the price series were stationary. The markets' cointegration test findings demonstrated that, despite their physical separation, they were linked in terms of price transmission over the long and short terms; nonetheless, the degree of integration is low. The results of the study indicate that one pair showed bi-directional causation, 6 and 5 links showed uni-directional in rice and maize markets respectively, also thirteen (13) and fourteen (14) pairs of rice and maize market price respectively, showed no causal relationship between them. The study showed that prices in GOMR, ADM, and YOM States adjusted to equilibrium more quickly over time than the prices in the other states. It’s also suggested that a percentage increase in ADR, BORR, TAR, BORM and YOM price would lead to increase of 38.9% 23.6%, 27.1%, 30.4% and 38.2% in TAR, GORR YOR, ADM and GOMM respectively. This shows that there is short run relationship between the states in the study area. Therefore, it is recommended that, to facilitate integration, market players should invest in technology (electronic trading platforms) and standardize trading and settlement procedures. This would help to minimize operational inefficiencies across various markets.