Annals of the Social Science Academy of Nigeria 1(1) 1996 DOI: 10.36108/ssan/6991.08.0130
ASYMMETRIC PRICE RISK RESPONSE PATTERNS IN NIGERIAN MAJOR AGRICULTURAL EXPORT COMMODITIES
A.A. Adubi
National Centre for Economic Management and Administration, Ibadan, Nigeria
Abstract
This paper examine the output response of Nigeria’s export producers to price changes based on the assumption of asymmetry in price response which better reflects the realities of farmers economic behaviour. This output response is examined in the presence of price risk. Five major export crops -were studied, namely; cocoa, rubber, palm kernel, coffee and palm oil. The results indicate that farmers respond differently to increase and decrease in prices. This is& confirmation of asymmetric response. The elasticity of output response -was found to be positive and low with respect to a decrease in price. Results of the study show the need to stabilize the price of export crops and minimize its influence through the fortune of exchange rate changes or the world market price changes. This calls for a rethinking on the issue of Marketing Boards for export crop marketing.