Analysis of Price Stability of Rice and Co-Movement in Urban Markets in Niger State, Nigeria

Abstract

The aim of the study was to examine the economic impact of price stability of rice in Niger State, Nigeria. The study determined the relationship between and among rice prices in the study area. One urban market and three rural markets were purposively selected from each of the three (3) agricultural zones. Secondary data on monthly rural and urban retail prices of local rice were used. The data were sourced from Niger State Agricultural Mechanization Development Authority (NAMDA). The time series data covered the period 2009 to 2018. The study utilized coefficients of variation (CVs) and correlation coefficients to determine price dispersion and behavior of local rice in selected markets of Niger State. The coefficients of variation of the prices of rice indicate that all CVs are less than 100% which showed that the prices cluster around the mean price. Also, the correlation coefficients of retail prices of rice in the urban markets of Bida and Kontagora showed high and significant correlation. It indicates a high co-movement of prices of rice between the two urban markets. No correlation between Bida and Minna. This implies that as price increases in one market, it increases in the other markets. It can be inferred from the result that there was positive correlation among the two urban markets of Bida and Kontagora (0.85). and no significant correlation between Bida and Minna, repectively. The study recommended efficient dissemination of market information on the prevailing rice prices and provision of market infrastructures such as road network.