Abstract
Due to the Federal Government of Nigeria’s privatization and commercialization of the downstream sector of the oil industry, the prices of kerosene and gas, which are competitors to wood charcoal, have risen astronomically in recent years. This has also continued to shift demand away from them and back to wood charcoal. Wood charcoal business is, therefore, fast becoming a lucrative business in Nigeria. However, for agro-climatic reasons, production of wood charcoal is mostly concentrated around the forest regions of the country thereby underscoring its marketing as a very important component of the business environment with potential for mass employment creation and poverty alleviation. But no systematic assessment of this potential has been carried out to date. This paper examines the marketing of wood charcoal in Abia State Nigeria, especially as it concerns the margins, structure, price causality, and price transmission. The margins were however on the average, lower than the producer’s share of the consumer spending. The result of the analysis also suggests a competitive market structure for wood charcoal in the study area. Prices were determined at the producer level of the marketing chain, but producers were asymmetric in their price transmissions to the wholesale level. These observations suggest that policy intervention in the form of improving the socio-economic environment under which marketing agents operate and facilitation of market information flow (which could reduce the asymmetric behavior of producers) could improve marketing of wood charcoal in the study area, with important practical implications for poverty alleviation and food security.
Highlights
Wood charcoal is one of the major components or fractions of wood fuel
These observations suggest that policy intervention in the form of improving the socio-economic environment under which marketing agents operate and facilitation of market information flow could improve marketing of wood charcoal in the study area, with important practical implications for poverty alleviation and food security
The result of the analysis shows that the wholesale marketing margin was 22.3%, while that of the retailers marketing margin was 21.29%
Summary
Wood charcoal is one of the major components or fractions of wood fuel. Wood charcoal is processed from wood and wood materials from trunk, branches and other parts of trees and shrubs, processed by burning and passing through fire. According to the Food and Agriculture Organization of the United Nations (FAO), charcoal is the solid residue derived from controlled combustion of a wide range of materials under conditions of limited supply of oxygen (FAO, 1983). The resulting object is a black, charred material that has a distinct texture and appearance and used mainly for cooking, heating or generating energy through direct combustion (Food and Agricultural Organization, 1981). It has been a part of African culture for hundreds of years because it has been a part of everyday life, and is essentially used for cooking, and for food production (Agbugba, 2008)
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