COMPARATIVE STUDY OF THE MARKETING OF OIL PALM WINE AND RAPHIA PALM WINE IN SOUTH EAST, NIGERIA

COMPARATIVE STUDY OF THE MARKETING OF OIL PALM WINE AND RAPHIA PALM WINE IN SOUTH EAST, NIGERIA

ABSTRACTS

The study which compared the marketing of oil palm wine (OPW) and raphia palm wine (RPW) in South East, Nigeria was informed by the vast nutritional and economic values of the products, their potentials for poverty alleviation and dearth of information on the economics of marketing of the products in the area. The study specifically described the marketing channels of OPW and RPW, determined the market structure and conduct of OPW and RPW, and ascertained the profitability and efficiency of OPW and RPW marketing by the intermediaries. It also established the extent of market integration of OPW and RPW rural and urban markets’ prices; estimated the determinants of profit realized by OPW and RPW marketers; and identified the prospects and problems of palm wine marketing in the area. Multi-stage sampling method was used to select 240 respondents (120 wholesalers and 120 retailers). Primary and time series data were collected using structured questionnaire administered to the respondents by personal interview using trained research assistants. Descriptive and parametric statistics involving co-integration, enterprise budgeting and multiple regression techniques were used for data analyses. Results identified five marketing channels for palm wine in the area. Gini coefficient analysis gave concentration ratios of 0.19 and 0.44 for OPW and RPW wholesalers; 0.48 and 0.08 for OPW and RPW retailers respectively, implying a fairly competitive market. Major strategies used for market conduct were bargaining (83%) and creating customer friendly relationship (83%). Palm wine marketing was profitable in the area given the positive values of gross margin, net marketing income, mean net marketing income, and net return on investment of N5,025,872, N4,980,976.03, N41,508 and 0.37 for OPW; N3,640,020, N3,614,966.88, N30,124.72 and 0.96 for RPW. RPW was more profitable than OPW because it returned 96 kobo against the 37 kobo returned by OPW for every N1.00 investment. Palm wine prices in all markets in the area showed evidence of integration in the long run but RPW prices indicated better integration than OPW prices. Furthermore, the price causality test revealed that past rural prices of OPW did not Granger cause its current urban prices, while the past urban prices of OPW Granger caused its current rural prices. On the other hand, past rural prices of RPW Granger caused its current urban prices whereas the past urban prices did not Granger cause its current rural prices. Purchase and selling prices, transportation cost, and marketing cost statistically and significantly influenced pooled OPW and RPW marketers’ profit; marketing cost, purchase and selling prices were common significant determinants of profit realized by the wholesalers of OPW and RPW while selling price was the only common significant determinant of profit realized by the retailers of OPW and RPW. Palm wine has best potentials for use in refreshment, followed by ceremonies, traditional medicine, as raw materials, libation, lactation, and least weaning. The constraints to palm wine marketing arranged in descending order of seriousness were high cost of transportation, scarcity of modern storage facilities, low shelf life of the product, seasonality of supply, poor patronage, high cost of palm wine, adulteration, and price instability. Innovations such as use of hybrid plants, accurate plant spacing, new and efficient ways of tapping by associated Research Institutes in the country will help boost tappers productivity and income. Also, the establishment of small scale palm wine bottling industries through private initiatives would extend the products’ shelf-life, and make it available all year round. Government in collaboration with private initiatives should provide modern transportation, and market infrastructural facilities as well as soft loans, to enable the marketers operate at minimal cost, earn more profit in conducive environment and good health.