EVALUATING MAIZE PRICE VOLATILITY AND ITS IMPLICATION FOR FOOD SECURITY IN NIGERIA

Abstract

Evaluation of food price volatility is useful as price variations can be demanding when large and sudden, thereby creating risks for consumers, producers and traders. This paper examined maize price volatility and its implication for food security in the Nigeria by using Autoregressive Conditional Heteroskedasticity (ARCH) model and its extensions (GARCH and TGARCH) based on monthly maize prices between November, 2010 and October, 2017. The results show that maize price is relatively unstable although no evidence of leverage effect was observed. The absence of leverage effect would mean that positive news such as useful policies and good weather have bigger impact on volatility than negative news at the same scale. Consequently, investments in reducing post-harvest losses and storage facilities need to increase to guarantee stable prices and food security.