VERTICAL PRICE TRANSMISSION IN NIGERIAN RICE VALUE CHAIN: COPULAR MODELS APPROACH

Rice is a staple food consumed by Nigeria's high and low. Rice Prices have experienced strong variations over the last few years, both upwards and downwards. This increased volatility, combined with long-term prospects of rising rice prices due to the rice import ban highlights the necessity to increase the efficiency of the rice supply chain to ensure consumer prices reflect the evolution of inputs prices. This study assesses price transmission along the rice marketing chain in Nigeria. Static and time-varying copula methods were analysed on about 155 weekly price data obtained from different sources. Results suggest a positive link between producer, wholesaler and retailer rice prices. Such positive dependence is characterized by asymmetries during extreme market events that lead price increases to be transferred more completely along the supply chain than price declines. Price transmission asymmetries suggest potential market fragmentation and discrepancies in competition intensity along the chain.