Spatial Price Differential: An Analysis of Soyabeans Marketing in Benue and Enugu States, Nigeria

Abstract

Spatial price differential not only gives indication of potential profit margin but also a means of assessing the level and direction of market integration. The study examined the spatial price differential in soyabeans marketing in Benue and Enugu States, Nigeria. Primary data were collected from 207 marketers who were randomly selected from four markets each from Benue and Enugu States. Data were analysed using descriptive statistics, spatial price differential model, 4-point likert scale, ANOVA, correlation and t-statistics. Results showed that soyabeans marketers were dominated by literate (91.7%), young adult (mean of 39 years) males with a mean annual income of N474,370. Result of spatial price differential showed that while Annune market had positive price spreads for all the 12 months; Aliade market had only one negative price spread in June whereas Daudu had negative price spreads for five months (March, April, May, August and September). The result of ANOVA showed that there was significant difference (F=4.76; P≤ 0.01) in price spreads among the three markets studied. Correlation result showed significant relationship between purchase price (0.68**), transfer cost (-0.708**) and price spreads. The major constraints to soyabeans marketing were low demand, poor road network, low access to credits, high transportation costs, few soyabeans processing companies and heavy imposition of levies and taxes. Positive and negative price spreads indicates ineffiency in soyabeans marketing and these could be occassioned by the above mentioned constraints. Credit facilities should be advanced to marketers in the study area. Again, provision of infrastructural facilities like good roads and storage facilities could increase the efficiency of soyabeans marketing in the study area.

Keywords: Soyabeans, Price differential, Price spreads, efficiency