ECONOMIC ANALYSIS OF PRICE DIFFERENTIALS AND PROFITABILITY OF PALM OIL MARKETING IN OSHIMILI NORTH LOCAL GOVERNMENT AREA, DELTA STATE, NIGERIA

P. O Emaziye and O. J Ovharhe
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P. O Emaziye: Department of Agricultural Economics and Extension, Faculty of Agriculture, Delta State University, Asaba Campus, Asaba, Delta State, Nigeria.
O. J Ovharhe: Department of Agricultural Economics and Extension, Faculty of Agriculture, Delta State University, Asaba Campus, Asaba, Delta State, Nigeria.

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Abstract: The main objective of the study focused on the price differential between the rural market at harvest season and the urban market after storage season. The second vital aim was to determine the profitability of palm oil after the storage season. Data were obtained with aid of structured questionnaires duly administered to respondents. Data were analyzed using descriptive statistics and the cost and return model. The purposive selection was adopted in the selection of 32 palm oil producers and marketers respectively. The study revealed that the mean age of 40 years and 37 years 6 months mostly engaged in palm oil production and marketing respectively. Males were mostly involved in palm oil production due to its tedious works nature while females were mostly engaged in its marketing. Both producers and marketers were illiterate with moderate household size with experience of 10 years and 11 years for palm oil producers and marketers respectively. The study observed that prices of palm oil were lower at a rural market during harvest season than after storage season. The difference in price/revenue was N6,250 accounted for 46.3% profit. The benefit-cost ratio was 1.32 signifies a profit of N0.32 for every N1 invested into the palm oil marketing business after storage season. A huge gap of profit between harvest and after storage season was established, revealing that marketers that store palm oil accrued more profit than palm oil producers. The study recommends palm oil producers should form themselves into co-operatives whereby enough of their resources could be pooled together to acquire a warehouse and possible vehicle to convey the product from rural market to warehouse for storage and later to urban market after storage season for sales resulting in more funds for the marketing business and reduction in transportation cost.

Date: 2020-12-30
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Published in Journal of Economics, Management and Trade, 2020, 5 (2), pp.52-58

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05263122

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