Analysis of Market Integration and Price Transmission in Nigerian Rice Markets

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Efficient market integration is essential for effective price discovery and resource allocation. This study analyzed market integration in Nigerian rice markets using monthly price data from five major markets (Lagos, Kano, Port Harcourt, Abuja, and Ibadan) over eight years. Cointegration analysis and error correction models were used. Results showed that rice markets were generally integrated but with asymmetric price transmission. Price increases were transmitted faster than price decreases, suggesting market power in the value chain. Lagos and Kano markets were found to be price-leading markets. Transaction costs, including transportation and market access fees, contributed to incomplete price transmission. Recommendations include investments in market infrastructure and competition policy enforcement.