Evaluation of Palm Oil Market Dynamics in Ogbadibo Local Government Area, Benue State, Nigeria

Abstract

This study examined the analysis of palm oil marketing in Ogbadibo Local Government Area of Benue State, Nigeria. Specifically, the study examined the socio-economic characteristics of the palm oil marketers in the study area; marketing channels; determined the marketing costs and return incurred by palm oil marketers in the study area; determined the factors that affect the marketing of palm oil in the area and to determine the constraints experienced by palm oil marketers in the study area. The research employs a public opinion survey using well-structured questionnaire and interview schedule to achieve the specific objectives. Data were collected from 120 respondents in September, 2024, the peak of palm oil marketing in the study area through the administration of a questionnaire and was analyzed with the use of descriptive statistics such as frequency, and percentages and determined multiple regression. The result showed that palm oil marketing is a women-dominated business as revealed by (82.5%) of the respondents were female. The results also indicated that people from the ages of 31 – 40 are more interested in palm oil marketing as they formed the majority with about 50%. The majority (73.8%) of the marketers were married which showed that there were more married people involved in the marketing of palm oil in Ogbadibo Local Government Area of Benue State. Also, majority (45%) of the marketers have been in the palm oil business for 5 to 10 years. Furthermore, all respondents had formal education. The majority (60%) of palm oil marketers have household sizes of 2– 4 persons, with majority (42.5%%) earning between N 61,000 – N 80,000 as monthly the income of the majority of the marketers. Also, the result showed that on the average, the total variable cost incurred was N26, 000 while fixed cost amounted to N3, 500, on the return side, the average total revenue amounted to N57, 600, the gross margin of the marketers was estimated to be N26, 100, the profit of N22, 600 while the net return on investment was 0.55% per gallon per day. Result of pricing efficiency ratio of 1.175 and 1.367 for wholesalers and retailers respectively, indicated that wholesalers and retailers quoted prices were under efficient implying that few of them were running the business at a loss. The major constraints affecting palm oil marketers were high cost of transportation, lack of access to credit facilities, substitution by other products among others. The study concluded that palm oil marketing was profitable and solvent with a return on investment of 0.55% and a profit of N22, 600 per gallon per day or (1 gallon =3.7854 liters). The study recommends that there should be an improvement in the transportation system to reduce the high cost of palm oil transportation.