Effects of Price and Exchange Rate Fluctuations on Agricultural Exports in Nigeria

The study focused on the effects of price and exchange rate fluctuations on Agricultural exports (cocoa) in Nigeria. Secondary data were collected from the publications of Central Bank of Nigeria (CBN): Statistical Bulletin, Economic and Financial Reviews, Bullion and Annual Reports and Statement of Accounts (various issues). Other sources included the Trade Summary and Abstracts of Statistics published by the Federal Bureau of Statistics and the International Statistics of the IMF. An export supply function for cocoa was specified and estimated using the Ordinary Least Squares Regression. Results showed that exchange rate fluctuations and agricultural credits positively affect cocoa exports in Nigeria. Results also revealed that relative prices of cocoa are insignificantly related to quantity of export, however, it has a negative sign which is in line with the a priori expectation. The result, therefore, implies a positive significant effect of exchange rate volatility on cocoa exports in Nigeria. The recommendation that agricultural credit schemes should be restructured in a way that should meet the needs of farmers; and such credit facilities should be made available and accessible to cocoa farmers in order to boost their production capacity. Exchange rate has impacted positively on cocoa export in Nigeria, hence, there should be a free market determination of exchange rate for export of cocoa in Nigeria.