Supply and demand models for falcata (Paraserianthes falcataria (L.) Nielsen) and yemane (Gmelina arborea Roxb.) sawlogs in Caraga and Cagayan Valley Regions, Philippines

This study was undertaken to develop supply and demand for falcata and yemane sawlogs in Caraga and Cagayan Valley Regions. Specifically, the study aimed to: (1) describe the sawlog production systems for falcata and yemane in Caraga and Cagayan Valley Regions; (2) identify factors affecting demand for and supply of yemane sawlogs in Caraga and Cagayan Valley Regions; (3) determine demand and supply elasticities of the two species in the Caraga and Cagayan Valley Regions; and (4) compare the supply and demand models for falcata and yemane sawlogs between Caraga and Cagayan Valley Regions. Cross-section data were used in the model construction. Five structural equations were developed: (1) supply of falcata sawlog for Caraga Region; (2) demand for falcata sawlog in Caraga Region; (3) supply of yemane sawlog for Caraga Region; (4) supply of yemane sawlog in Cagayan Valley Region; and (5) demand for yemane sawlog in Cagayan Valley Region. In Caraga Region, the supply of falcata sawlogs was influenced by investment cost (INVEST), price of falcata pulpwood lagged one year (PFPW-1), price of falcata sawlog lagged one year (PFSW-1), price of labor (P Labor), and profit margin (PM). Meanwhile, the demand for falcata sawlog was influenced by plant capacity (CAP), price of falcata sawlogs (PFL), and price of labor (P Labor). Equilibrium quantity for falcata sawlogs is 422.058 cu m per year and equilibrium price is P2,870.50 per cu m. Supply of yemane sawlogs in Caraga Region was influenced by the price of yemane sawlog one year (PYSW-1) price of yemane pulpwood current year (PYPW), and cost of delivery (CDEL). On the other hand, supply of yemane sawlogs in Cagayan Valley Region was influenced by price of yemane logs lagged one year (P log-1) and cost of documentation (DOC). On the other hand, demand for yemane sawlogs in Cagayan Valley Region was influenced by investment cost (INV) and loan (LOAN). The degree of responsiveness of supply/demand to its factors were measured using elasticity. Comparison at supply of falcata sawlogs and supply of yemane sawlogs in Caraga Region was done with both models being influenced by price of sawlogs lagged one year. PFSW-1 negatively influenced the supply of falcata sawlogs while PYSW-1 positively influenced the supply of yemane sawlogs. The regression coefficient of PYSW-1 was not significantly different from zero. On the other hand, PYSW-1 is significantly different from zero. Likewise, a comparison on demand for falcata sawlogs in Caraga Region and demand for yemane sawlogs in Cagayan Valley was done, however, there were no common variables as point of comparison.