Analysis of Price Transmission and Market Integration in the Tomato Value Chain in Kano and Lagos States

Understanding price transmission and market integration in agricultural commodity value chains is essential for assessing market efficiency and designing effective price stabilisation policies. The tomato value chain linking production zones in Kano State to consumption markets in Lagos presents an analytically important case of inter-regional market integration in Nigeria. This study analysed price transmission and market integration in the Kano-Lagos tomato value chain using monthly price series data spanning a 72-month period from 2019 to 2024. Johansen cointegration tests, error correction models, and the Ravallion market integration test were applied using secondary price data from the National Agricultural and Food Statistics Information System supplemented by primary trader survey data. Results indicated significant long-run cointegration between Kano farm gate and Lagos wholesale tomato prices, with approximately 62 percent of price shocks transmitted from Kano to Lagos within three months. Asymmetric price transmission was found, with price increases transmitting faster than price decreases, suggesting market power concentration at the wholesale level. Transport cost volatility was identified as the primary short-run determinant of price spread variation. The study recommends policy attention to reducing transport bottlenecks and promoting market competition along the Kano-Lagos tomato corridor. Keywords: price transmission, market integration, tomato, Kano State, Lagos State.