VOLATILITY IN PRICE OF MILLED RICE IN NIGERIA (2015-2024)
Abstract
The marketing of agricultural commodities has experienced price volatility from year to year. This thesis determines the volatility in price of milled rice in Nigeria (2015-2024). The objectives are to measure the volatility in milled rice price in Nigeria from 2015-2024, to examine the trend of the price of milled rice, to investigate the seasonal effect, and to analyze the factors influencing milled rice price volatility in Nigeria. Secondary data sourced from Food and Agricultural Organization of the United Nations statistical database (FAOSTA). The time series data were based on trend and seasonal effect of milled rice prices in five Nigeria markets from 2015-2024. The first objective was achieved by the use of standard tools such as standard deviation and coefficient of variance to measure the degree of volatility in milled rice price in Nigeria. Time series data was employed to examine and investigate the trend and seasonal effect of the price of milled rice. For the fourth objective, econometric tool (GARCH) was employed to analyze the factors influencing milled rice price volatility in Nigeria. The results revealed the significance variation in five regions (Giwa, Ibadan, Kano, Kaura, and Maiduguri), highlighting distinct trends and fluctuations, with certain peaks and troughs correlating with seasonal agricultural patterns. The seasonal variations demonstrate how prices are influenced by harvest cycles, market demand, and external factors such as weather. Also, the use of GARCH models further emphasizes the volatility patterns in these markets, illustrating the impact of market shocks and external influences on price fluctuations. The study recommended that fiscal and monetary policies that can help increase local market production and keep it's price within the reach of common man should be pursued by government and other stakeholders in the Nigeria Agricultural Sector. Also, government should intensify efforts in providing basic infrastructure in rural areas, and efforts should be made to initiate effective climate and market information networks, encourage formation of cooperatives and provision of loans to rice traders.
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