EFFECT OF OIL PRICE FLUCTUATIONS ON THE PRICE OF SELECTED AGRICULTURAL COMMODITIES IN NIGERIA (JANUARY 2000 – DECEMBER 2015)

This study was conducted to examine the effect of oil price fluctuations on the price of selected agricultural commodities in Nigeria using time series data sourced from Central Bank website, United States Energy Information Administration (E.I.A) website and Food and Agricultural Organization Statistics (FAOSTAT) between January 2000 and December 2015. The variables employed include oil price, exchange rate, the price of agricultural commodities (rice, wheat, soybean, palm oil). The Non-Linear Autoregressive Distributed Lag Model (NARDL) was employed in the analysis of the data using Eviews 9.0.

 The result of the data analysis revealed that increase and decrease in oil price have a positive and significant relationship with the price of all the agricultural commodities in the short run, while in the long run, increase and decrease in oil price have a positive but insignificant relationship with the price of all the agricultural commodities. 

This study therefore conclude that oil price have a short run positive effect on the price of the selected agricultural commodities. Thus, it is recommended, based on the findings of this study that the government should formulate agricultural policies that will insulate the economy in the short run against any global food crisis that may result from oil price change.