• S. B. AKPAN


Oil palm, Nigeria, production, rainfall, price, derivatives


The study examined the short and long runs supply elasticity of oil palm fruit in Nigeria. The study used time series data from 1991 to 2017 production year. Cointegration and error correction model were used to derive the long and short runs elasticities of supply with respect to the specified explanatory variables. The findings revealed that, all specified variables were made stationary at first difference. The trend analysis of the oil palm fruit supply showed an average annual growth rate of 0.45% with a significant positive sign of accelerating growth in future. Empirical results showed that, in the long run, price of oil palm fruit, price of substitute, value addition, harvested land, rainfall and consumers’ income all exhibited positive significant inelastic relationship with oil palm supply in the country. The short-run model also displayed positive significant and inelastic relationship with respect to rainfall, harvested land, value addition and owned price of oil palm fruit. The findings however, did not find evidence of adaptive behaviour of oil palm fruit producers as the previous lag price and output did not respond significantly to the supply of oil palm fruit in the short run. To increase production of oil palm fruit in the country, it is recommended that, sustainable local price of oil palm fruit should be enhanced by introducing price guarantee programme for producers in addition to promoting value addition activities in the sub-sector