14 Response of vegetable oil production to monetary policy in Nigeria ARTICLE INFO Article history: Received May 10, 2021 Received in revised form June 10, 2021 Accepted June 29, 2021 Available online July 7 , 2021 ABSTRACT Monetary policy is one of the macroeconomic variables that control economy. This is why the study evaluated the response of vegetable oil production to mone- tary policy in Nigeria. Annual time series that spanned for 39 years were obtained from the database of Central Bank of Nigeria and Food and Agriculture Organisa- tion. Data obtained were analysed using descriptive statistics, quadratic trend model and ARDL model. The result indicated that the coefficient of beta 2 (B 2 ) for vegetable oil production (9.15E-05) is positively signed at P-value > 0.1. The implication is that vegetable oil production in Nigeria experienced stagnated growth. The result showed that monetary policy determinants such as inflation rate and broad money supply made significant negative impact on vegetable oil production in Nigeria. Therefore the study strongly recommended that the mone- tary authorities should make available commercial loan for industries involved in the production of vegetable oil at the single-digit prime lending rate to encourage them to grow and expand their vegetable oil agribusiness. Keywords: Autoregressive distributed lag model Ng-Perron unit root test Monetary policy Vegetable oil production Corresponding Author’s E-mail Address: judechiemeriemgbanya@outlook.com https://doi.org/10.36265/jonages.2021.010203 ISSN-1597-4488 © Publishing Realtime. All rights reserved. 1 Department of Agribusiness and Management, Michael Okpara University of Agriculture, Umudike, Abia State, Nigeria 2 Department of Business, Organizational Management and Leadership, University of Phoenix, Arizona, United State of America. 3 Department of Agricultural Technology, Akanu Ibiam Federal Polytechnic Unwana, Afikpo Ebonyi State, Nigeria 1.0 Introduction Vegetable oil is an important agricultural value added product that is produced from the edible part of plant mat- ters such as fruits of oil palm, seed of groundnut, soy- bean, cotton, sunflower, melon, moringa (Moringa oleif- era), cashew, beniseed and so many other crops that con- tain extractable oil. Vegetable oil is produced for house- hold and industrial uses. When the vegetable oil is refined or bleached, it serves as cooking oil for the households’ uses and other industrial uses (Matthaus, 2007). When the vegetable oil is in the crude form, it serves for an interme- diate product used by industries to produce refined or bleached vegetable oil. In Nigeria, groundnut is the second -largest source of domestic vegetable oil after palm fruit. Among the world sources of vegetable oil, soybean oil (31%) ranked the number one position, followed by palm oil (26%) while groundnut oil (7%) ranked the fifth posi- tion (Freeman et al., 1999). Moreover, Nwalieji et al. (2018) opined that vegetable oil production in Nigeria is characterized by low productivity at the production and processing level. This is caused by factors affecting agri- business such as lack of storage and marketing facilities, supply of inputs, low quality of output, inefficient pro- cessing method, lack of infrastructures like good road, J.C. Mgbanya* 1 ; J. C. Onwumere 1 ; K. Njoku 2 & M. U. Agunannah 3 Mgbanya et al. jonages 1(2) 2021, 14-22