Effects of International Market Dynamics on Food Prices and Volatilities: A Panel Analysis of Rice and Beef in Nigeria

Abstract

This study looks at the influence of foreign market dynamics on domestic food prices and volatility in Nigeria, utilising rice and beef as examples of calories and basic protein-rich commodities. The research employed data from 2004 to 2024, including international pricing indices, exchange rates, inflation rates, and yearly human population. The double-log model and Pearson correlation were employed to investigate the relationship between the variables, and price volatility trends were also determined. The findings indicate that exchange rate fluctuations and inflation are emerging as significant transmission mechanisms. While local output of grains and meat moderated price levels, and it was inadequate to offset foreign shocks. The volatility assessment also revealed that global market changes worsened domestic price instability, posing threats to food affordability and accessibility. The report highlights Nigeria's susceptibility to global food market shocks, emphasising the importance of strong macroeconomic policies, increased local production capacity, and strategic food stockpiles. These measures are critical for reducing reliance on imports, stabilising food prices, and improving food security in the face of increasingly linked global commodities markets. Given these findings, there is a critical need for strategic policy activities such as exchange rate stabilisation, increased domestic food production, effective price stabilisation mechanisms, and regional food buffer systems. Reducing Nigeria's reliance on food imports and strengthening domestic value chains will help lessen the impact of global market volatility on food prices, hence boosting food security and economic resilience.

Keywords: global, food prices, market dynamics, rice, meat, volatility, production.

DOI: 10.7176/EJBM/17-5-02

Publication date: June 30^th 2025