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Most studies on local rice in Nigeria were centred on increasing production, consumption or competitiveness with very few addressing the issue of marketing efficiency. Filling this gap requires a study on extent of pricing contacts in the market for local rice. In this study, secondary data consisting of urban monthly retail price series in the six southwest states of Nigeria were collected and analyzed. Analytical techniques used included Augmented Dickey Fuller (ADF), Johansen Co-integration and Granger Causality models. Empirical results indicated that growth in retail prices was highest in 2004 in Ogun Market (48.7%) and Ondo Market (45.4%) implying that local rice was more costly in these states. Retail prices were more volatile in Lagos Market (37.3%) and least volatile in Ogun Market (30.4%). The ADF test showed all price series were non-stationary at their levels but were stationary after first-difference. Pair-wise market integration model indicated that prices were co-integrated connoting high degree of marketing efficiency. The Multiple Co-integration model also indicated five co-integrating equations in six, validating the result of pair-wise market integration test. Granger causality model revealed that the supply-deficient markets in Lagos and Osun States were driving prices elsewhere. These results may have arisen from the storability of rice and closeness of the market locations examined. Despite high level of linkage, there is need for all stakeholders in the market to continue to effectively perform their roles so that economic benefits derivable from this scenario of strong pricing contacts can be fully realized and sustained.
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