Structure and Performance of Palm Oil Marketing In Kogi State, Nigeria

Abstract

The study evaluated the structure and performance of palm oil marketing in Kogi State, Nigeria. A multi-stage random sampling procedure was employed in the selection of 120 marketers for the study. Primary data were collected with the aid of interview schedule to elicit relevant information from the marketers. Data were analyzed using descriptive statistics; Gini coefficient model; multiple regression model and, gross and marketing margins analyses. The study showed that 76% of the marketers had 1-5 years of marketing experience. Furthermore, an average marketer had a gross margin of ₦200,830.26/annum and net revenue of ₦197,807.06/annum. This shows that palm oil marketing is a profitable business in the study area. The Gini-coefficient analysis revealed a high level of concentration and high level of inequality in the income distribution of the marketers in the study area. The low marketing margin (12%) implies that the market performed efficiently. The analysis of the factors affecting the net returns of palm oil marketers revealed that the R2 was 0.919 which implies that the included explanatory variables explained 92% of the variation in net returns of each marketer in the study area while the F-ratio of 213.87 shows that the whole model is significant. The educational level and cost of capital input were both negative and significant at 1% and 5% level of probability, respectively. This is an indication that these costs have decreasing impact on net return. The coefficient of cost of purchase and cost of transportation were positive and significant at 1% level of probability. This is an indication that these costs have increasing impact on net return of the marketers in the study area. Based on the findings, it is therefore recommended that marketers should form cooperatives for easy access to loan so as to boost their financial base for improved performance of palm oil marketing in the State.