ANALYSIS OF PROFITABILITY AND OPERATIONAL EFFICIENCY OF SHEA BUTTER MARKETING: EMPIRICAL EVIDENCE FROM IBADAN, OYO STATE, NIGERIA.
Olugbire, O.O1, *Aremu, F.J, 2 Oyedele3 P.B, Ogedengbe, T.A3
1 Department of Forest Economics &Extension Service, Forestry Research Institute of Nigeria, Jericho, Ibadan, Oyo
2Department of Agricultural Economics, Obafemi Awolowo University, Ile Ife, Osun State, Nigeria
3Department of Agricultural Extension and Rural Development, Obafemi Awolowo University, Ile Ife, Osun State
Email: fakunle2011@gmail.com
Abstract: This study examines empirically profitability and operational
efficiencies in the marketing of Shea butter in Ibadan, Oyo State, Nigeria.
Primary data were used for the study. Well structured questionnaires were used
to obtain information from a total of 120 Shea butter marketers in three major
Shea butter markets. Costs and returns analysis were used to determine
profitability of the marketers while efficiency ratio, profitability ratio and
operational efficiencies were used to examine the Shea butter marketing
performance in terms of efficiencies measures. The results of the analysis revealed that marketing of Shea butter was
highly profitable in the study area; but the marketers that perform the
function of both wholesalers and retailers (wholesaler/retailer) had the
highest operational efficiency level (85.8%) followed by the retailers (83.5%)
while the wholesalers have the least (59.7%). Similarly, for every N100 invested in Shea butter
trading in the study area, wholesalers/retailers, retailers and wholesalers
realized N 76.7, N 51.4 and N 23.2 respectively while total gross margin per
quarter of wholesaler/retailer and wholesaler were N 1,017,000 and N 922,000 respectively. The retailer has the least
gross margin of N 890,000 per quarter. This positive and size of profit
obtained for each Shea butter marketing institutions is an indication that
these institutions were able to recover their operating expenses. Hence, Shea
butter market is profitable and efficient.