Analysis of Price and Market Integration for Onion in Rural-Urban Markets of Oyo State, Nigeria

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Author	Layade A.A. , Adeoye I.B.
ISSN	2307-2466
On Pages	238-243
Volume No.	3
Issue No.	5
Issue Date	September 01, 2020
Publishing Date	September 01, 2020
Keywords	Onions, price movements, market integration, rural and urban

Abstract

Accessibility to information on commodities prices is important for optimization of returns to the farmers and prices paid by the consumers. This study examined the trend in price movements and market integration for onion in rural-urban markets in Oyo state. Monthly retail prices in N/kg covering a period of eight years (2003 to 2010) were obtained from Oyo State Agricultural Development Programme (OYSADEP). Data were analysed using discriptive statistics, Augmented Dicker Fuller (ADF) test, Cointegration test, Granger causality test and index of market connection (IMC). Price trend analysis result revealed that price onion peaked in November and December. Lowest price was obtained in March (N82.40/kg) and April (N84.14/kg) for rural and urban markets respectively. ADF test revealed that prices were all integrated of order one I (1). Co-integration and Granger causality analysis showed that prices of onions in urban and rural market were integrated in the long run, and that the urban market price granger caused rural market price of onions. The index of market connection (IMC) was 0.610, indicating high short market integration. The study, therefore recommends that the policy which will enhance greater market efficiency through improvement of transportation infrastructure and market price information in the state should be encouraged.

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