Domestic Food Price Volatility and Supply Response of Staple Foods (Maize, Rice and Wheat) in Nigeria

This study examined the effects of domestic food price volatility on the supply response of staple foods such as maize, rice, and wheat in Nigeria using monthly time-series data spanning 1981–2023. Data were sourced from the National Bureau of Statistics, the Food and Agriculture Organization, the World Bank, and the Central Bank of Nigeria. Augmented Dickey–Fuller and Phillips–Perron tests showed that all variables were integrated of order one, I(1). Johansen cointegration results indicated the existence of three long-run cointegrating relationships among the variables. Regression results revealed that global food price shocks exerted a positive and significant effect on staple food supply (β = 0.296, p< 0.01), while domestic food prices also significantly increased supply response (β = 0.157, p< 0.01), with an adjusted R² of 0.698. Furthermore, global demand positively influenced global food price shocks (β = 0.428, p< 0.01), whereas global supply had a dampening effect (β = −0.267, p< 0.01), and exchange rate depreciation intensified price shocks (β = 0.192, p< 0.01). The study recommended strengthening domestic production capacity to reduce vulnerability to global price shocks.