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African Journal of Agricultural Marketing ISSN 2375-1061 Vol. 4 (7), pp. 001-009, July, 2016. Available online at 
www.internationalscholarsjournals.org © International Scholars Journals 

 

Author(s)                                           Author(s) retain the copyright of this article. 
 
 

 

Full Length Research Paper 

 

Margins and economic viability of fresh 
coconut marketing in the Kumasi metropolis of 

Ghana 

 
V. Abankwah1*, R. Aidoo2 and B. Tweneboah-Koduah1

 
 

1
Department of Agricultural Economics and Extension Education, University of Education, Winneba, 

Ghana. 
2
Department of Agricultural Economics, Agribusiness and Extension, Kwame Nkrumah University 

of Science and Technology, Kumasi, Ghana. 
 

Accepted 12 February, 2016 
 
The study was conducted in the Kumasi metropolis of the Ashanti region of Ghana to examine the margins and 
economic viability of fresh coconut marketing. Cross-sectional data was randomly collected from 120 individual fresh 
coconut marketers in market centers across the metropolis and analyzed, using Deconstructed Marketing Margins 
and Return on Capital Employed. The study revealed that fresh coconut marketing in the Kumasi metropolis is a 
viable venture that employs people within the economically active age group. Actors in the market have very low 
educational background with some having no formal education. It has been identified as a safe net for school drop 
outs, proving meaningful employment for them. Fresh coconut marketing has been found as a lucrative venture to 

economically empower both men and women to improve their livelihoods. With a minimum of GH₡18.00, as a start-up 
capital, one can enter into this venture and receive proportionate returns. Actors in the market receive rates of returns 
several times higher than fixed-deposit interest rate in the Ghanaian economy because they can turn over their 
relatively low capital several times in the year to accrue more profit. Retailing, though needs a very small start-up 
capital, is the most profitable level along the distribution channel. Transporting and distributing fresh coconut from 
the production centre to the consumer market is more profitable than rationing them to retailers and wholesalers in 
the marketplace. 

 

Key words: Economic viability, deconstructed market margin, sedentary wholesaler, itinerant wholesaler. 
 
 
INTRODUCTION 

 
Coconut (Cocos nucifera) is the most extensively grown 
and used nut in the world and the most important palm. It 
is an important commercial crop in many tropical 
countries, contributing significantly to their economies 
(Philips, 1994). Coconut contributes 1.2 to 2.6% 
exclusively to the Gross National Product (GNP) in the 
producing countries. (Australian centre for International 
Agricultural Research, 1995).  

In Ghana, it is the most important cash crop along the 
coastal belt. It is estimated that there are 17,000 farmers 
growing coconut on 43,000 hectares and producing a 
total of 224,000 tons of coconuts (Wahwa and Kumar, 
1992). According to Adams et al. (1996), the coconut  
 
 
 
*Corresponding author. E-mail: vincentabankwah@yahoo.com. 

 
 
 
 

 
industry in Ghana is worth at least 12.83 billion Cedis 
(US$8.04 million) which is approximately 1.7% of the total 
1995/98 agricultural exports. An important characteristic 
of coconut is its ability to spread wealth and generate 
employment in rural areas where few other opportunities 
exist. The industry provides employment (formal and non-
formal) for at least 762,000 people in Ghana. However, 
the coconut market in Ghana is fragmented and has not 
received much significance due to lack of agricultural 
policy on the promotion of coconut marketing and 
consumption of coconut products (Yeboah, 2009). A lot of 
information is available on the production of coconut both 
globally and domestically. Coconut production in Ghana 
has increased considerably over the past decades.  

In 1981, Ghana produced 160,000 (MT), 220,000 (MT) 
in 1993 and 223,977(MT) in 2000 (FAO, 1993; Gyimah, 
2001). Consumption of fresh coconut over the past 

file:///C:\Users\user\Documents\REPUBLICATION\AGRICULTURAL%20SCIENCES\AppData\Local\Temp\www.internationalscholarsjournals.org


 
 
 

 

decades has received paramount importance because of 
its nutritional and medicinal value. The fruit can protect 
the body against various cancers including, breast and 
colon malignancies. Due to its effects on insulin 
secretion, coconut can help reduce diabetes-related 
symptoms. It is considered as a quick source of energy; 
coconut is used to improve physical performance and 
also promotes weight loss by increasing the metabolic 
rate (Coconut Development Board, 2008). It is reported 
that most people consume fresh coconut because of its 
natural medicinal and nutritional value. It is estimated that 
about 15% of the total coconut produced in the country is 
consumed fresh (Yeboah, 2009).  

Farmers are naturally inclined to believe that many 
current systems of marketing are costly in relation to the 
services provided and traders absorb too high a 
proportion of the final price paid by consumers 
(Whiethan, 1972). Consumers also believe that excessive 
profiteering activities of traders are responsible for high 
prices of fresh coconut. There is the tendency to casually 
compare the price of fresh coconuts in the producing 
areas to prices in urban markets and conclude that 
traders are making too much profit, without giving much 
thought to the costs of getting coconut to consumers from 
producers. Gyimah (2001) observed that high market 
price of fresh coconuts could not be wholly attributed to 
excessive profiteering activity of middlemen, but scarce, 
expensive production and distributing factors are also 
responsible for high consumer price of fresh coconuts.  
He estimated that, over 50% of the marketing margin in 
fresh coconut is attributed to actual marketing costs. 
Yeboah (2009) established that, fresh coconut farmers in 
the western region received about 46% of consumer 
price, 26% accounted for transportation and handling 
charges and the remaining 28% was the traders’ profit 
margin.  

As a result, low prices at the farm gate and high prices 
in the consumer market are generally blamed on 
inefficiency in the marketing system and exploitation by 
traders (Punchihewa, 1991). Potential investors in this 
industry, consumers, as well as policy makers need to 
answer many questions in their minds by knowing the 
marketing margins and economic viability of the market. It 
is therefore, imperative to examine the margins and 
economic viability of fresh coconut marketing in the 
Kumasi metropolis of Ghana. 
 

 
METHODOLOGY 
 
Data collection 
 
The study was conducted in the Kumasi metropolis. A 
reconnaissance survey conducted in the metropolis in the first week 
of January, 2010 revealed three categories of fresh coconut 
marketers - itinerant wholesalers, sedentary wholesalers and 
retailers. A fourth category which was found only in the production 
centers is the local assemblers. Greater volume of fresh coconuts 
entering the metropolis is handled at Cross market. Other 

  
  

 
 

 
markets of importance are Roman Hill, Suame Roundabout, Asafo, 
Sofo line, Bantama, Aboabo, Ahodwo, Atonsu, Kurofoforomu, 
Kwadaso, Asawasi, and Akwatialine markets. Retailing of fresh 
coconut in the Kumasi metropolis is usually seen on pavements of 
streets, school parks and at the entrances of most major and minor 
market centres. Fresh coconut retailing is done in open air, with 
fresh coconuts packed on truck, wheelbarrow and at times a retailer 
carries specific amount of fresh coconuts on a pan and hawk from 
house to house.  

Since actors in the markets were not many, cluster sampling 
technique was adopted to interview all coconut sellers in each of 
the marketing centers selected in the metropolis. This was done to 
ensure a higher degree of confidence and a smaller margin of error 
in the study. The list of all marketers in each marketing centre was 
collected and used to facilitate enumeration to ensure effective 
coverage of the target , especially the itinerant wholesalers who 
were not stable. Call-back interviews were conducted until the 
entire target was covered.  

A questionnaire was used to extract information from 120 
individual marketers of their annual values of marketing costs, 
revenues and prices of the previous year, their socio-economic 
background and the channel of fresh coconut distribution. The 
questionnaire, which was made up of both open-ended and close-
ended questions, was pre-tested and the necessary adjustment 
made to ensure accurate data collection. Questionnaires were 
administered from 20th to 31st January, 2010. Table 1 depicts the 
sample size distribution over the selected market centers. 

 

Conceptual framework 
 
The objective of this study is to determine the magnitude of margins 
between producer and marketers along the distribution channel and 
the economic viability of fresh coconut marketing. To achieve this, 
Deconstructed Marketing Margin and Return on Capital Employed 
(RoCE) were used for analyzing data.  

Marketing margin, according to Shepherd (1996), is the 
percentage of the final weighted average selling price taken by 
each stage of the marketing chain. Moreover, this analysis is to 
determine the cost components of the margins and their 
contribution to the consumer price. Marketing margins has also 
been expressed by Abbott and Makeham (1990) as the difference 
between purchase price and re-sale price of a commodity. This 
convention was employed in calculating the margins. Functional 
margins were determined by calculating the cost of performing the 
different marketing functions along the marketing chain. Proportion 
of traders’ profits of the consumer price was also computed. 
Marketing margin (Mm) was computed as the difference between 
costs of purchasing coconut per year (Cc) and revenue derived 
from sale of fresh coconut per year (Rc),  

 ∑      
 

  
   

…… …… …… …… …  
 

    
 

       

 
To, at least break even, the revenue from the sale of fresh coconut 
should encompass the cost of purchasing fresh coconut, marketing 
cost (Mc) and traders’ profit margin (Pm).  

 ∑        
 

     …… …… … …… ……   
      

 

         
 

        
 

 
Equations 1 and 2 gives Equation 3, as a model for 

deconstructed marketing margins along the market chain.  

 ∑     
 

  
   

…… …… …… …… …  
 

    

      

The  marketing margin  must  cover  costs  involved in transferring 
 



 
     

 

   Table 1. Sample size distribution.    
 

        
 

   
Market centre 

 Marketers of fresh coconut   
 

   

Itinerant wholesalers Sedentary wholesalers Retailers Total 
 

    
 

   Riz Cross 19 15 - 34 
 

   Central market - 1 9 10 
 

   Roman Hill 12 11 - 23 
 

   Suame R’about 9 8 - 17 
 

   Asafo market - 5 - 5 
 

   Sofo line - - 4 4 
 

   Bantama - - 3 3 
 

   Ahodwo - - 4 4 
 

   Asawasi - - 3 3 
 

   Atonsu - - 4 4 
 

   Kwadaso - - 2 2 
 

   Kurofoforom - - 7 7 
 

   Aboabo - - 2 2 
 

   Akwatialine - - 2 2 
 

   TOTAL 40 40 40 120 
 

 
Source: Reconnaissance survey data, 2010. 

 

 
produce from one stage to the next and provide a reasonable return 
to those doing the marketing (Abbott and Makeham, 1990). Fresh 
coconuts must be assembled, loaded and offloaded, packed and 
repacked, sorted, cleaned and processed in various ways and must 
be presented to consumers in convenient quantities. As a result, 
transaction costs for such products tend to be high in relation to 
their value (Coleman and Trevor, 1989). Costs of marketing fresh 
coconut (Mc) are the transaction cost Tc, cost of working capital 
(Wc), depreciation of fixed assets or cost of rented assets (Ac) and 
opportunity cost of trader’s time (Oc). Hence, Equation 3 becomes:  

 ∑         
 

  
     

… …… …… …… ……  
 

        
 

          
 

 
From Equation (2) profit margin was obtained as: 
 

  

∑
    

!
 

"
 

#
 …… … …… …… …… $ 

 
 

 
The five equations allowed the estimation of the marketing and 
profit margins, the various components of the marketing cost and 
their proportions of the marketing margins. The relevant transaction 
costs considered in the study are: transportation, handling, 
assembling, market toll and unofficial charges such as bribes.  

Agricultural lending rates of ten (10) financial institutions in the 
metropolis, comprising all categories of financial institutions were 
sampled and the mean rate (28%) used to represent the cost of 
capital in the metropolis. Straight-line method of depreciation was 
also used to provide for depreciation of fixed assets. The 
reconnaissance survey revealed the educational background of 
fresh coconut marketers as very low. As a result, they had little or 
no placement in formal jobs. They also have relatively low working 
capital that could not enable them go into many other private 
businesses. So the choice of selling fresh coconut might have 
prevented the person from becoming a sweeper, which is 

somewhat available attracting annual maximum revenue of GH₡720 
for educational level not exceeding Senior High School (SHS), 
provided a scale that was used as the opportunity cost of trader’s 
time.  

Return on Capital Employed (RoCE) is given as the ratio of profit 
margin (Pm) to capital invested (Ci) expressed as percentage: 

 
 
 

 ∑  /    
 

%&     ( )) … …… …… …… …… *   

 
  

 

      
 

 
Capital invested is the combination of working capital and value of 
fixed asset. Returns to traders were compared to interest that they 
would have earned had they invested their capital in a fixed deposit 
savings at the bank. The percentage return on capital which 
measures profitability of the venture is compared with a fixed 
deposit cut-off rate of 21.5% as an indicator of economic viability. If 
the returns to traders fall below this, it means that traders are 
operating at sub-optimal level which is not viable. This value was 
computed at each stop, along the marketing chain and used as a 
measure of equitable vertical income distribution in the marketing 
system (Scarborough and Kydd, 1992). 

 

RESULTS AND DISCUSSION 
 
The results of the study have been discussed in the 
subsequent sub-sections. The analysis aimed at 
examining the background of fresh coconut marketers, 
distribution channel of fresh coconut, marketing margins, 
marketing cost, profit margins and assessing the 
economic viability of fresh coconut market. 

 

Background of fresh coconut marketers 
 
Fresh coconut marketing was seen as a major business 
for the active labor force, as a majority of the marketers, 
as is evident in Table 2, were between the ages of 18 and 
40 years. There were, however, a significant portion of 
school dropouts who were absorbed into the business. 
Fresh coconut marketing is a job opportunity which is 
almost open to both sexes. Figure 1 indicates that 
majority of fresh coconut marketers were females (52%). 
Males constituted 48% of fresh coconut traders.  

The study indicates in Figure 2 that, close to a third of 
fresh coconut traders in the Kumasi metropolis had 



  
 
 

 
Table 2. Age of fresh coconut marketers.  

 
 Age group Age range Frequency Percent 

 Dependent/school dropout < 18 14 11.7 

 Active labor force 18 – 40 94 78.3 

 Less active labor force 41 - 60 10 8.3 

 Retiring labor force > 60 2 1.7 

 Total Total 120 100 
 

Source: Survey data, 2010. 
 
 
 
 
 
 
 

 

P
e
rc

e
n

ta
g

e
 

 
 
 

 
53  
 
52 
 
51 
 
50 
 
49 
 
48 
 
47 
 
46  

Male Female 
 

Se x 
 

Figure 1. Sex distribution of fresh coconut marketers. Source: Survey data, 2010.  

 

Tertiary 

0% 

 

SHS 

14%  
No formal 
Education 

29% 
 
 

 

Primary 
JHS 

41% Education 
16% 

 

 
Figure 2. Educational level of fresh coconut  
marketers. Source: Survey data, 2010. 

 

 

formal education. While 16% had formal education up to 
the primary school level, majority obtained up to Junior 
High School (JHS) and the remaining 14% had some 
secondary education. Fresh coconut marketing was 
found to provide livelihoods for school drop outs, since 
majority 45% of the traders had below primary education. 
Those who could not cross Junior High School (JHS) and 

 
 

 

Senior High School (SHS) to vocational and tertiary 
institutions constituted 55% which have been absorbed 
by fresh coconut marketing.  

Fresh coconut marketing has been an informal 
business over many decades. As can be seen in Table 3, 
very few (10%) have been in the business for over 10 
years. The business has however, become attractive to 



 
 
 

 
Table 3. Experience in fresh coconut marketing.  

 
 Experience(in years) Frequency Percentage 

 <1 14 12 

 1-10 94 78 

 11-20 10 8 

 >20 2 2 

 Total 120 100 
 

Source: Survey data, 2010. 
 

 

many (90%) over the last decade. 
 

 

Distribution channel of fresh coconut 
 

The marketing channel is made up of various individuals 
who handle fresh coconut as it moved through the 
marketing processes. The channels are the routes 
through which fresh coconut flow from the producer to the 
ultimate consumer. Fresh coconut marketed in Kumasi 
metropolis generally passed through three group actors 
along the chain of distribution. These are the itinerant 
wholesalers, sedentary wholesalers and the retailers. The 
itinerant wholesalers handled a greater volume of fresh 
coconut. Table 4 is a summary of the flow of fresh 
coconut to the various actors along the channel.  

Fresh coconuts passed through one or more of the 
indicated actors before it reached the consumers. 
Majority of the retailers obtained fresh coconut supply 
from the sedentary wholesalers who assemble fresh 
coconut in the metropolis from the itinerant wholesalers. 
Quite a larger portion (23%) obtained supply from 
itinerant wholesalers who assembled and transported 
fresh coconut from the production centers. Very few (2%) 
obtaining coconut from producers. Most of the sedentary 
wholesalers (72%) obtained fresh coconut from itinerant 
wholesalers with little supply from producers (20%) and 
other sedentary wholesalers (8%). Itinerant wholesalers, 
on the other hand, mainly assembled fresh coconut from 
the producers (92%) for onward distribution into the 
consumer market. The observation has been translated 
into a web of distribution channels presented in Figure 3.  

The web of fresh coconut distribution channel was a 
mix of short and long chains of distribution. The itinerant 
wholesalers transport fresh coconut from Edina, 
Komendda, Cape coast, Assin Fosu and Eguafo in the 
Central Region and Jomoro in the Western Region. 

 

Deconstructed marketing margins along the 
distribution channel 
 
The annual marketing margin at the retail level, as 

depicted in Table 5 was GH₡7128.00 with a profit margin 

of GH₡6318.00, which is a retailer’s returns to labour per 
year representing 88.7% of the marketing margin. This is 
achievable because they were able to turn over their 

 
 
 
 

 

capital 52 times in a year. Major cost items of the retail 
marketing margin were transaction cost, cost of working 
capital, depreciation of fixed asset and opportunity cost of 
the trader representing 6.3, 0.1, 0.2 and 4.8% of the 
marketing margin respectively. The volume of fresh 
coconut sold annually at the retail level (831,000 bags) as 
is evident in Table 6, was higher than that sold at the 
sedentary wholesaler level. This is because retailers 
bought coconut also from the itinerant wholesalers and 
the producers as well, as is depicted in Figure 3. Itinerant 
wholesalers handled the greatest volume of fresh coconut 
because they supplied to both retailers and sedentary 
wholesalers. They could turn over their capital 24 times a 
year. As can be seen in Table 7, the retailers priced their 

coconut higher at GH₡0.50 per coconut compared to 

GH₡0.30 and GH₡0.25 at the sedentary wholesaler and 
itinerant wholesaler levels, respectively and making the 

highest price margin of GH₡0.20. This, coupled with low 
transaction cost and the fact that, they were able to turn 
over their working capital 52 times a year has made 
retailers reap the highest profit margin which is 88.7% of 
the retail marketing margin.  

The annual marketing margin at the sedentary 

wholesaler level is GH₡1134.30 with a profit margin of 

GH₡340.24, which represented 30% of the marketing 
margin. The cost items at this level are transactional cost, 
cost of working capital, depreciation of fixed asset and 
opportunity cost of the trader representing 23.2%, 4.0%, 
1.1% and 41.7% of the marketing margin respectively. 
The volume of fresh coconut sold annually by the 
sedentary wholesalers (360,000 bags), as is evident in 
Table 6, is lower than that sold by the retailers. This might 
be due to the reason that, they could turn over their 
working capital 18 times in a year. Table 7 indicates that, 
the sedentary wholesalers priced their coconut lower at 

GH₡0.30 compared to GH₡0.50 at the retailer level. The 
lower sedentary wholesaler margin is due to a very low 
profit component and relatively low transaction cost which 
is probably due to the provision of very few marketing 
services.  

The itinerant wholesale margin is GH₡7453.20, with a 

profit component of GH₡5326.19, which represents 
71.5% of the marketing margin. At this level, transaction 
cost, cost of working capital, depreciation of fixed asset 
and opportunity cost of the trader represents 20.4%, 
2.4%, 0.00% and 5.70% of the itinerant wholesale 
margin, respectively. The volume of fresh coconut sold 
annually at this level (1325, 551 bags), as is evident in 
Table 6, is higher than that sold at the retailer’s and 
resident wholesaler’s level. As is evident in Table 7, the 

itinerant wholesale price margin of GH₡0.15, is three 
times that of the sedentary wholesaler. As a result, the 
itinerant wholesaler, though incurred almost six times the 
transaction cost of the sedentary wholesaler, the former 
made a profit margin which is almost fifteen times that of 
the latter. The high marketing margin at the itinerant 
wholesaler level was due to a very high profit component 



  
 
 

 
Table 4. Flow of fresh coconut supply.  

 
 

Source of fresh 
  Type of trader   

 

 

Retailer Sedentary wholesaler Itinerant wholesaler 
 

 
coconut  

 

Frequency Percentage Frequency Percentage Frequency Percentage 
 

  
 

 Producer 1 2 8 20 37 92 
 

 Itinerant wholesaler 9 23 29 72 3 8 
 

 Sedentary wholesaler 30 75 3 8 0 0 
 

 Total 40 100.0 40 100.0 40 100.0 
 

 
Source: Survey data, 2010.  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Figure 3. Distribution channel of fresh coconut. Source: Author’s construct. 

 
 

 

that resulted from high price margin. The results show 
that, profit margins earned by the traders who deal in 
fresh coconut was generally higher. Moreover, the profit 
of retailers and itinerant wholesalers were higher than 
that of sedentary wholesalers. According to Kohls and 
Uhl (1990), profit rates vary depending on the structure of 
the market and the product differentiation. It has also 
been established by FAO (1994) that profits may be 
relatively higher in markets where few firms control most 
of the supply.  

Resident wholesalers’ sold the lowest volume of fresh 
coconut (360,000 bags), with retailers and traveling 
wholesalers selling the highest volume of fresh coconut, 
831,000 bags and 1325, 551 bags, respectively. This is 
due to their varied rates of turning over their working 
capital. A nut of fresh coconut at the farm gate was sold 

at GH₡0.10. Itinerant wholesalers sold a nut of fresh 

coconut to resident wholesaler at GH₡0.25 making a 
price margin of GH 0.15. Sedentary wholesalers and 

 
 
 

 

retailers, on the other hand, sold a nut of fresh coconut at 
GH 0.30 and GH 0.50 with a price margin of GH 0.05 and 
GH 0.20, respectively. Retailers made the highest 
margin. 
 

 

Economic viability of fresh coconut marketing 

 

The economic viability of fresh coconut marketing was 
assessed using Returns on Capital Employed (RoCE), to 
indicate the profitability of the venture and the results 
presented in Table 8. The retail returns is the highest 
among the marketing agents whereas returns to the 
sedentary wholesale is the lowest.  

The amount of capital employed by retailers in the fresh 
coconut marketing was very low with a mean value of GH 
38.25. This increased drastically to the itinerant and 
wholesalers along the distribution channel. The mean 
values of capital employed for sedentary wholesalers 



 
 
 

 
Table 5. Annual revenue, marketing margins and profits for each trader along the distribution channel.  

 
 

Measures of marketing margin 
 Statistic ( GH₡)  Percentage of 

 

 

Mean Minimum Maximum Std. dev. marketing margin 
 

  
 

 Retailer      
 

 Cc 13473.00 6120.00 24840.00 6896.79 - 
 

 Rc 20601.00 9000.00 36000.00 10781.98 - 
 

 Tc 441.00 72.00 792.00 251.11 6.2 
 

 Wc 9.88 5.00 18.00 4.89 0.1 
 

 Ac 14.07 0.00 33.00 11.33 0.2 
 

 Oc 345.00 120.00 600.00 221.08 4.8 
 

 Pm= Rc -[Tc +Wc+Ac+Cc+oc] 6318.00 - - - 88.7 
 

 (a) Mm = Tc+Wc+Ac+Oc+Pm 7128.00 - - - 100 
 

 Sedentary wholesaler      
 

 Cc 5190.45 1570.00 48896.00 7190.74 - 
 

 Rc 6324.75 2808.00 10080.00 1607.68 - 
 

 Tc 263.60 180.00 408.00 63.81 23.2 
 

 Wc 44.98 26.00 78.00 11.36 4.0 
 

 Ac 12.98 0.00 33.00 13.66 1.1 
 

 Oc 472.50 120 600.00 210.14 41.7 
 

 Pm= Rc -[Tc +Wc+Ac+Cc+Oc] 340.24 - - - 30.0 
 

 (b) Mm =Tc+Wc+Ac+Oc+Pm 1134.30 - - - 100 
 

 Itinerant wholesaler      
 

 Cc 7161.00 1200.00 21000 4823.66 - 
 

 Rc 14614.20 31200.00 50400.00 10356.92 - 
 

 Tc 1522.28 576 1888 335.18 20.4 
 

 Wc 179.63 38 468 106.16 2.4 
 

 Ac 0.00 0.00 0.00 0.00 0.00 
 

 Oc 425.10 120.00 720 190.78 5.70 
 

 Pm= Rc-[Tc + Wc+Ac+Cc+Oc] 5326.19 - - - 71.5 
 

 (c) Mm= Tc+Wc+Ac+Oc+Pm 7453.2 - - - 100 
 

 Total Mm = (a+b+c) +Ms +Mi 15,715.50 - - - - 
 

 
Source: Survey data, 2010. Rc= revenue from coconut; Cc = cost of purchasing coconut; Tc = Transaction cost; Wc = cost of working capital; Ac 
= depreciation of fixed asset; Oc = opportunity cost o f traders; Pm = profit margin; Mm = marketing margin. 

 
 

 
Table 6. Annual volume of fresh coconut sold along the distribution channel.  

 
Type of trader Mean volume of coconut sold ( “50 coconut bag”) 

Retailer 831,000 

Sedentary wholesaler 360,000 

itinerant wholesaler 1325,551 
 

Source: Computed from survey data, 2010. 
 
 

 

itinerant wholesalers were GH 172.25 and GH 655.00, 
respectively. The enterprise is characterized by a low 

 
 
 

 

capital outlay. The RoCE for retailers, sedentary 
wholesalers and itinerant wholesalers were 16518, 198 



  
 
 

 
Table 7. Price per fresh coconut along the distribution channel.  

 
 

Type of trader 
 Price of fresh coconut (GH₡)  

 

      

 

Mean Price margin Minimum Maximum 
 

  
 

 Retailer 0.50 0.20 0.32 0.50 
 

 Sedentary wholesaler 0.30 0.05 0.20 0.32 
 

 Itinerant wholesaler 0.25 0.15 0.14 0.30 
 

 Producer 0.10 - 0.10 0.00 
 

 
Source: Computed from survey data, 2010. 

 

 
Table 8. Returns on capital employed.  

 
 

Parameter 
 Statistics (GH₡)  

 

 

Mean Minimum Maximum Standard deviation 
 

  
 

 Retailers     
 

 Ci 38.25 18.00 70.00 19.36 
 

 Pm 6318.05 - - - 
 

 RoCE = Pm/Ci ×100 16518% - - - 
 

 Sedentary wholesalers     
 

 Ci 172.25 100.00 300.00 43.47 
 

 Pm 340.24 - - - 
 

 RoCE = Pm/Ci ×100 198% - - - 
 

 Itinerant wholesalers     
 

 Ci 655.00 150.00 1800.00 389.02 
 

 Pm 5326.19 - - - 
 

 RoCE = Pm/Ci ×100 813% - - - 
 

 
Ci = capital invested; Pm = profit margin; RoCE = return on capital employed. Source: Computed from survey data, 2010. 

 

 

and 813%, respectively. Retailers recorded the highest 
return on capital followed by itinerant wholesalers. 
Sedentary wholesalers had the least return on capital. 
The values were very high, due to low capital invested 
and the fact that capital was turned over several times 
during the year. Itinerant wholesalers turned over their 
capital 24 times within a year. Retailers who realized the 
highest profitability were found to have turned over the 
working capital 52 times in a year.  

This observation shows that, there was no equitable 
distribution of income along the distribution channel as 
required by economic goal. Fresh coconuts are priced 
exorbitantly at wholesale and retail levels, thereby making 
abnormal profit with a profitability being several times 
more than the going interest rate in the economy. 

 

CONCLUSION AND RECOMMENDATION 
 
Fresh coconut marketing in the Kumasi metropolis is a 
viable venture that employs people in the active economic 

 
 

 

age group. Actors in the market have very low 
educational background with some having no formal 
education. It has been identified as a safe net for school 
drop outs, proving meaningful employment for them. 
Fresh coconut marketing has been found as a lucrative 
venture, to economically empower both men and women 
to improve their livelihoods. With a minimum of GH 18.00, 
as a start-up capital, one can enter into this venture and 
receive proportionate returns.  

Actors in the market receive rates of returns several 
times higher than going interest rate in the economy 
because they can turn over their proportionately low 
capital several times in the year to accrue more profit. 
Retailing, though needs a very small start-up capital, is 
the most profitable level along the distribution channel. 
Transporting fresh coconut from the production centre to 
the consumer market is more profitable, than rationing 
them to retailers in the marketplace. Encouraging more 
traders into the marketing system by making people 
aware of its viability and making available capital in the 



 
 
 

 

form of loans to stiffen competition will lower consumer 
price for fresh coconut, redistribute profits equally along 
the distribution channel and make the market perform 
efficiently. 
 

 
REFERENCES 
 
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