ABSTRACT

The major objective of this study is to access the economics of palm oil market in Abia state, Nigeria. However, the specific objectives are to: identify the socio-economic characteristics of the respondents in the study area; examine the structure, conduct and performance of the market for the processors in the study area; determine the factors affecting the net returns of the processors; and make recommendations based on the findings. Multi-stage sampling procedure was adopted in the study. First two Local Government Areas each were selected from each of the three agricultural zones of Abia state. After which, twenty palm oil merchants were selected randomly from these Local Government Areas, making a total of one hundred and twenty ( 120) respondents. Data for the study were primary data, which were collected through the aid of a set of questionnaire administered to the respondents. All the respondents returned their questionnaire and the therefore were used in the analysis. Objectives (i) and (ii) was realized through descriptive statistics such as frequencies, means and percentages; part of objective (ii) was achieved through marketing margin; while multiple regression was employed in objective (iii). The result showed that majority of the respondents 46.67 percent were between the ages of 40- 49 years, while those 60 years and above, constituted the least 3.33 percent. Among the respondents, 73.33 percent of them were females while 26.67 percent of the respondents were males. The study showed that 81.67 percent of the respondents were married while only 18.33 percent were single. Majority of the respondents. 60 percent were of household size between 4-6 persons, Majority of the respondents had spent only 6 years in school, having obtained the first school leaving certificate. These categories were 70 percent. Those who had spent 14-15 years in school acquiring the Ordinary National Diploma (ONO) or the National Certificate in Education (NCE) were only about 1.67 percent. None of the respondents had a higher qualification in terms of educational attainment above the ONO and NCE. Fifty (50) percent of the respondents had acquired between 0-3 years experience in the business in the study area. In terms of mode of entry, 81.6 7 percent of the processors attested that entry into the market was free while 18.33 percent noted that entry was not free. for the fact that majority of the respondents indicated that the mode of entry is free, palm oil processing in Abia State could be adjudged to be relatively free. The result also showed that 74.16 percent of the respondents were not allowed into the business until they pay toll fees. Those who indicated that payment of business premises was a barrier accounted for 77.50 percent. In terms of the margin or profit, the enterprise was a profitable one. This arose from the difference obtained from the total cost which stood at 1,969,790.00 and revenue which was . 2,175,271.00. It therefore, means that the net return was ' 205,481.00. 'The result showed that the coefficient of educational attainment, processing experience, labour cost, cost of palm fruits, other costs and technology were significant at various levels and with different signs. Costs which are associated with production and processing should be reduced to a manageable level. This is so important as it will help increase the profits of the processors. Technological improvements in the processing operations should be encouraged. This will not only reduce drudgery but also contribute immensely in the profit accruing to the processors.