Price Transmission and Signals of Cowpea Across Zones and Value Chain in Niger State of Nigeria Price Transmission and Signals of Cowpea Across Zones and Value Chain in Niger State of Nigeria

Abstract

This study investigated price transmission and signals of the three major urban cowpea markets and their respective adjunct rural market across the zones and value chain in Niger state of Nigeria using monthly time series data spanning from January 2003 to December 2016. The selected urban markets were Bida, Minna, and Kontagora, and their adjunct markets were Lafene, Zungeru, and Manigi, respectively. Model build on the assumption of linear and symmetric price transmission was used to analyze the data. The stationarity tests showed that the price series of all the variables were integrated of order one. The cointegration test results of the markets both at horizontal and vertical integrated levels proved that despite that, these markets were spatially separated geographically; they were well connected in terms of price transmission across them. It was observed that price changes are temporary and would converge to equilibrium within a given time span. However, Bida market was found to me more pricing and operational efficiency when compared to its counterparts because of its close proximity to the largest terminal markets for cowpea in the country, i.e., Lagos state and other states in the southwest of Nigeria. Furthermore, the price signals across the zones and value chain will be well transmitted, indicating that price changes in one zone are consistently related to the price changes in other zones and are able to influence the prices in other zones. However, the direction and intensity of price changes may be affected by the dynamic linkages between the demand and supply of cowpea. A proper focus on domestic supply management along with international trade coupled with strong market surveillance and intelligence efforts would help control escalating prices and also help in minimizing the distortions widening the gap between the wholesale and retail prices of cowpea.