Market and price system of charcoal: A case study of charcoal from Southern Thailand
1991
Ponnarong Prasertsri
Two types of charcoal, which are mangrove and para rubber charcoal, are widely produced in the South. The mangrove charcoal is regulated by the government, owing to its forest-based raw materials. In contrast to mangrove charcoal, para rubber charcoal is not under the control. According to the analysis on the structure of production cost, small-sized kilns (below 112 cubic meters) can produce mangrove charcoal with both technical and economic efficiency. Meanwhile, para rubber charcoal, for industrial charcoal making, can be produced with the lowest cost if brick kilns are used. Almost all the charcoal produced is sold to Bangkok through the large-scale wholesalers. There are only a few large-scale wholesalers whose main trade is mangrove charcoal. Generally, during the shortage period, charcoal producers seem to have higher market power than the traders in Bangkok. As a result, the traders will lose some profit to the producers, since the traders themselves can not raise the price as much as the increase in the purchased price, owing to the perceived ceiling price with respect to the price of liquefied petroleum gas (LPG). This is also the case of para rubber charcoal, except the market power of both producers and traders which are not significant. The result on the marketing margin analysis indicates that from the sale price of each type of charcoal, mangrove charcoal producers get 38 percent,while para rubber charcoal producers get 32 percent. Mangrove charcoal large-scale wholesalers get 32 percent as their profit share in the sale price, while the para rubber charcoal traders get only 5 percent. The returns to the mangrove charcoal producers and traders are also high which are 67 percent and 70 percent respectively compared with that to the para rubber charcoal producers and traders.
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