International Journal of Applied Research and Technology

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International Journal of Applied Research and Technology
ISSN 2277-0585
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Economic Analysis of Palm Wine Marketing in Idemili

North Local Government Area of Anambra State, Nigeria
Nwibo, S. U., Odo, N. E. and Igberi, C. O.
Ebonyi State University, Abakaliki, Nigeria
Available online: July 25, 2012

To cite this article:

Nwibo, S. U., Odo, N. E. and Igberi, C. O. (2012). Economic Analysis of Palm Wine Marketing in Idemili North Local
Government Area of Anambra State, Nigeria. International Journal of Applied Research and Technology. 1(3): 3 9.

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International Journal of Applied Research and Technology

International Journal of Applied Research and Technology

Vol. 1, No. 3, July 2012. 3 9.

Esxon Publishers

Economic Analysis of Palm Wine Marketing in Idemili North Local Government

Area of Anambra State, Nigeria
Nwibo, S. U., Odo, N. E. and Igberi, C. O.
Ebonyi State University, Abakaliki, Nigeria

(Received: 24 May 2012 / Accepted: 11 June 2012 / Published: 25 July 2012)

Abstract
The study analysed the economics of palm wine marketing in Idemili North Local Government Area of Anambra State. A
sample size of 128 palm wine marketers were randomly selected using multistage random sampling technique. Data were
collected from primary source using structured questionnaires. Data obtained were analysed using both descriptive and
inferential statistics based on the objectives of the study. The result obtained showed that more males (69.5%) were
involved in marketing of palm wine marketing. The study further revealed that majority of the respondents are married
(65.5%) with an average household size of 10. The result also shows that the marketers are within the active age of 41
years having stayed in the business for an average of 13 years. Most (48.4%) of the marketers had primary school
educational and an average annual income of N200, 000.00. From the sale of 600 litres of palm wine, the marketers
realized a profitable of thirty eight thousand, three hundred naira (N38, 300.00) showing the benefit cost ratio that in every
N1 invested in the business, N0.60k was made as profit. The result of multiple regression analysis on the effect of socioeconomic characteristics of marketers on their profit showed that the coefficient of multiple determination (R2) was 0.761
with coefficients of age, household size, educational level, annual income and years of experience being positive and
statistically influencing the profit level of the marketers. The study identified; poor patronage, weather variation, and
seasonality of supply as the major constraints to palm wine marketing in the area. Based on the findings it is therefore
recommended that processing of palm wine should be commercialized to guarantee extension of shelf life, and the
development of appropriate packaging technology obtained in carbonated drinks.

Keywords: Economics, Palm wine, Marketing, Oil palm, Profit, Idemili-North

Corresponding author:
E-mail: sunwibo92@yahoo.com
ISSN 2277-0585
2012 Esxon Publishers. All rights reserved.

International Journal of Applied Research and Technology

Introduction
Palm wine is an alcoholic beverage produced by tapping the sap of the oil palm and the raphia palm. It contains a heavy
suspension of yeast and bacteria giving the beverage a milky-white appearance (Okafor, 1998). Palm wine is the
fermented sap of certain varieties of palm trees including raphia palm. It is an important alcoholic beverage in West Africa
where it is consumed by more than ten million people (Howtopedia, 2008). It is highly perishable liquid consisting mainly
of water, sugar, vitamin and many aroma and flavour components in very small amounts. Palm wine plays significant
nutritional and social roles in the life of the consumer. Although produced mainly in rural areas by tappers in Nigeria, the
bulk of the beverage is consumed in the Urban centres (Ekundayo, 2000).
Palm wine is an important economic resource in West Africa especially in Nigeria where it is estimated
that per capita income from palm wine tapping can equal or exceed Nigeria per capita income with production estimate of
two million metric tons of palm wine (Okereke, 2000). In Cameroon, palm wine provided employment for three quarters of
the male population in some villages (Ukhum, 2005), and monthly income of 20,000 to 35,000 France (US $71 -24) for
small producers. Palm wine is a useful source of food and stimulant in breast milk production. It serves as a solvent in
curing measles in children and syphilis in adults (Arowolo, 2000).
In traditional Ibo communities of Nigeria there exist two types of palm wine, these are: the down wine locally
called Ogwudani obtained from the terminal cabbage of a felled oil palm tree and the fermented palm wine from the
immature male inflorescence of oil palm trees (Nkwuenu). According to Ihekoronye and Ngoddy (1985), wines obtained
from the terminal cabbage of a felled oil palm tree seem very poisonous for human consumption because it contains some
methanol and propanols while fermented palm wine contains only ethanol. Despite the socio-economic importance of
palm wine, it appears there is a dearth of empirical data on the economics of palm wine marketing especially in the study
area. It was on this premise that the study seeks to fill the gap in knowledge by determining the economics of its marketing
in the area.
The broad objective of the study was to describe the socio-economic characteristic of palm wine marketers in the
study area, analyse the costs and returns to palm wine marketing in the area, determine the effect of the socio-economic
characteristics of marketers on the profit of marketing palm wine in the area and analyse the constraints to palm wine
marketing in the area.
Materials and Methods
The study area was Idemili North Local Government Area of Anambra State. It is one of the 21 Local
Government Areas in Anambra State. The area is made up of 10 communities and occupied a total land area of 139,000
square kilometres and a population estimate of 431,005 people (NPC, 2006). It is located on longitude 080 E and latitude
040 N. The annual rainfall ranges from 1607mm to 2123mm with a mean temperature of 35 oC between the months of
November and March and 21oC between April and October.
A multi-stage random sampling technique was used to select a total of 128 out of 386 palm wine marketers in the
area. Data were collected from primary source using well structured questionnaires which were administered on the 128
palm wine marketers. Descriptive statistics, gross margin analysis, multiple regression analysis and factor analysis were
deployed in the analyses of data.
Model Specification
Model for Multiple Regression Analysis
Y = f (X1, X2, X3, X4, X5,X6,X7,X8 ) .. .implicit form
Y= (a0 + a1x1 + a2x2 + a3x3 + a4x4 + a5x5 + a6x6 + a7x7 + a8x8 + et) ...explicit form
Where;
Y = profit (N)
X1
=
X2
=
X3
=
X4
=
X5
=
X6
=
X7
=
X8
=
a0
=
a1 a9 =

age (years)
Gender
Household size
Marital status
Educational level
Years of experience
Annual income
Primary occupation
Constant term
Coefficients of regression

Results and Discussion

Result of the socio-economic attributes of the marketers as shown in Table 1, revealed that most of the respondents are
within the economic productive age. The age distribution shows that greatest percentage (68.7%) of the respondents was
within the age bracket 31-50. This finding disagrees with Ekpeno (2002) that palm wine business as a sector of agriculture
are being manage only by old people from 50 years and above. It was also observed that 62.5% of the marketers are male.

International Journal of Applied Research and Technology

This collaborate the findings of Adinya, et al. 2008, who opined that male, dominated the marketing of palm wine in
Akwa-Ibom. Again, most (69.5%) of the marketers are married with a mean household of 10. This was an indication that
the marketers have the chance of getting family labour for their palm wine marketing activities. The
result
equally
revealed majority (88.3%) of the respondents had attended formal education. This finding tends to disagrees with Ali
(2008) who opined that more illiterates are found in the agricultural sector of the countrys economy especially in palm
wine industry. Meanwhile, the marketers earned an average annual income of N200, 000.00. It was equally observed that
the marketers had a reasonable level of experience as they had an average palm wine marketing experience of 13 years.
Table 1 reveals that reasonable number (37.5%) of the respondents are engage in marketing and tapping and 32.0% are
into marketing and farming as their primary occupational.
From the result of gross margin analysis, it was observed that the total cost of marketing of 600 litres of palm
wine was N42, 000.00, as the total revenue was N69, 000.00, and the gross margin was N47, 520.00 The profit of N38,300
was realized from the marketing of 600 litres of palm wine in the area while the benefit cost ratio was N1.60 which
indicated that that for every N1 spent in the marketing of palm wine, a profit of N0.60k was realized. This finding therefore
collaborated Adinya et al. (2008), who reported a profit of N9, 840.00 from 6,139 litres of palm wine sold at N30.00 per
litre in Uyo, Akwa-Ibom state.
Table 3 showed the result of multiple regression analysis of the socio economic characteristics of marketers of
palm wine on the profit made from the marketing activities in the area. The coefficients of multiple determination (R2) was
0.761 or 76.1%, signifying that 76.1% of total variation in profit realized from palm wine marketing in the area was
explained by the explanatory variables included in the model. Age (x1) of the marketers was positively related to profit.
Indicating that a unit increase in age in years will bring about a unit increase in profit. This was a departure from the a
priori expectation, that as marketers advance in age their productivity declines. This however, maybe due to the age bracket
of the marketer, who are within their active economic productive age bracket with 40 years as their average age. House
hold size (x4) of the marketers was positively related to their profit, signifying that a unit increase in household size will
cause a unit increase in profit level. This is in line with the a priori expectation. The coefficient of educational level (x 5)
was positively related to their profit, but statistically insignificant. Indicating that more education the marketers acquire the
more profit they will realize. This conforms to the a priori expectation. Annual income (x6) of the marketers was positively
sign and significant at 10% level of significant. Indicating that a unit increase in annual income will cause a unit increase
in profit level. This conformed with the a priori expectation. Years of experience (x7) was positively related to the profit of
the marketers in the area, indicating that the more experience the direct marketers acquires the more profit they will make,
ceteris paribus although it was not significant statistically it conforms to the a priori expectation.
However, gender (x2) and marital status (x3) of the marketers of palm wine were negatively related to their profit
at 1% level indicating an inverse relationship between these variables and the profit of the marketers. The inverse
relationship of marital status with profit was in contrary to the a priori expectation as married couples integrate in the
marketing activities in order to meet-up with their household needs.
The study identified inadequate processing facilities, weather, poor patronage, seasonality of supply and
inadequate preservative facilities as the major constraints to palm wine marketing in the area.
Conclusion and Recommendation
Palm wine marketing in Idemili North Local Government Area of Anambra State was a profitable venture as evidenced
from the result of profitability analysis. The study based on the findings, recommended the commercialization of palm
wine processing to guarantee extension of shelf of the product so as to make it fit for export and for future consumption as
obtainable with other carbonated beers and drinks, modern techniques for preservation of palm wine should be developed,
palm wine marketers should form cooperative societies, to enable them access micro credit from government agencies and
financial institutions.
References
Adinya, I.B., Awoke, M.U., Ijoma, J.U., Edem, H.O., Enun, E.E. and Ekpe, S.A. 2008. Costs and Returns Analysis of Palm
Wine Marketing in Uyo Area of Akwa-Ibom State, Nigeria. Journal of Agriculture, Forestry, and the Social
Sciences, 6:(1). Available @: http://www.ajol.info/index.php/joafss/article/view. Retrieved on 3/13/2012
Ali, S. A. 2008. Toddy and Palm Wine. Available online @:
http://itdg.org/docs/technicalinformationservice/toddypalmwine.pdf.

Retrieved on 20/04/2008.

Arowolo, G.N. 2000. Characteristics of Coloured Wine Produced from Roselle. Institute Brewing. 115(2):91-94
Ekpeno, D. H 2002. The Stand of Agriculture in the Nigeria Economy. Production and characterization of wine from
mango fruit (Mangifera indica). World Journal Biotechnology. 21:1345-1350.
Ekundayo, E. F. 2000.Preparation of Pito,a Nigerian fermented beverage. Journal food

Science and Technology. 4:217.

Howtopedia, 2008. Toddy and palm wine fermented plant saps. Technical Brief on How to make palm wine.
http://www.howtopedia.org/en/ . Retrieved on 20th April,2008.

International Journal of Applied Research and Technology

Ihekoroye, A. I , and Ngoddy P.O. 1985. Integrated Food Science and Technology for the Tropics. Macmillan
Publisher, London
National Population Census (NPC) 2006. Official population report of Idemili L.G.A of Anambra state, Nigeria.
Okafor J. 1998. Microbiology of Nigerian palm wine with particular reference to Bacteria. Journal Applied Bacteriology.
38:1-7.
Okereke, O. 2000. The Traditional System of oil Palm Wine Production in Igbo- Eze Local government area of Anambra
state of Nigeria. Agriculture systems. 9:239-253.
Ukhum, M. E., Okolie, N. E. and Oyerinde A. O. 2005. Some Mineral Profile of Fresh and Bottled Palm Wine. A
Comparative Study of Africa Journal of Biotechnology. 4(8):829-832.

Table 1: Percentage Distribution of the Respondents According to SocioCharacteristics

Description
Frequency
Age (years)
20
6
21-30
18
31-40
31
41-50
57
51 and above
16
Gender
male
80
Female
48
Marital status
married
89
Single
20
Divorced
5
Separated
2
Widow/widower
12
Household size
1-4
8
5-8
15
9-12
73
13 and above
32
Educational level
no-formal
15
Primary
62
Secondary
44
OND/NCE
3
HND/B.SC
2
M.SC
2
Annual income (N)
20,000
2
21,000-50,000
4
51,000-80,000
3
81,000-120,000
2
121,000-150,000
16
151,000-180,000
24
181,000-210,000
54
211,000 & above
23
Years of experience
1-5
10
6-10
19
11-15
56
16-20
36
21 and above
7
Primary occupation
Tapping alone
12
Farming alone
25
Marketing/farming
41
Marketing/tapping
48
Others (marketers)
2
Total
128
Source: Field Survey, 2011

economic Characteristics.
Percentage
x
4.7
41
14.1
24.2
44.5
12.5
62.5
37.5
69.5
15.6
3.9
1.6
9.4
6.3
10
11.7
57.0
25.0
11.7
48.4
34.4
2.3
1.6
1.6
1.6
200,000
3.1
2.3
1.6
12.5
18.8
42.1
18.0
7.8
13
14.8
43.8
28.1
5.5
9.4
19.5
32.0
37.5
1.6
100.0

International Journal of Applied Research and Technology

Table 2: Costs and returns of Marketing of 600 litres of Palm Wine in Idemili North L.G.A
Items
Unit cost (N)
Total Cost (N)
Variable costs
Transportation
2,100
Rentage
100
1,000
Tax
1,800
Water bill
30
1,080
Cost of palm tree
200
10,000
Electricity bill
600
Preservatives
1,100
Miscellaneous
4,800
Total Variable Cost
22,480
Fixed cost
Bottles (10)
Gallons (8)
Funnel (6)
Tables
Chair
Total Fixed Cost
Revenue
GM = TR - TVC (69,000 - 22,480)
II = GM - TFC (46,520 - 8,220)
BCR = TR/TC (69,000/42,000)
Source: Field Survey, 2011

50
400
2,000
1,000

500
4,000
720
2,000
1,000
8,220

560

69,000
46,520
38,300
1:1.60

Table 3: Effect of Socio-economic Characteristics of Marketers of

Palm Wine on their Profit.

Variables
coefficient
Constant
39993.997
Age (x1)
98.383
Gender (x2)
-1043.314
Marital status (x3)
-780.288
Household size (x4)
160.868
Educational level (x5)
15.416
Annual income (x6)
0.009
Years of experience (x7)
116.852
R2
0.761
D.W
1.800
F-statistics
1.536
Standard error
2.73361
Source: SPSS Computed Field Data, 2011

standard error
2852.697
62.429
1124.702
506.153
207.851
127.268
0.005
128.325

t-value
14.020
-1.576
-0.928
-1.542
0.774
0.121
1.936
0.911

Sig
*
NS
NS
*
NS
NS
***
NS

International Journal of Applied Research and Technology

Table 4: Varimax Related component Factors on Constraints Associated with Direct Marketing and Retailing of Palm wine in the
Study Area

S/N Variables
V1
Poor patronage
V2
Distance from market
V3
Lack of portable water
V4
Seasonality of supply
V5
Inadequate processing facility
V6
Weather
V7
Poor knowledge of the business
V8
Lack of preservative facilities
V9
Market completion
V10
Lack of startup capital
V11
Lack of storage facilities
V12
High cost of transportation
V13
Irregular power supply
Source: Field Survey, 2011

Factor 1
Economic
0.416
-.241
0.098
0.394
0.601
0.411
-0.280
-0.154
0.023
0.07
-0.165
0.177
-0.002

Factor 2
infrastructural
0.558
0.096
0.262
-699
-0.136
0.008
-0.026
-0.167
0.282
0.100
-.028
0.098
0.002

Factor 3
environmental
0.643
-.031
0.001
0.160
-0.181
-0.002
0.145
0.556
-0.133
-219
0.171
-0.143
0.201