Abstract

This study is an attempt to analyse the temporal and spatial variation in timber prices in kerala and to identify the factors that could possibly influence such variation. Average annual prices for 8 species for the period 1956-57 to 1981-82 were estimated from the data collected from the records of the Forest Department. Five-year moving averages, based on real prices obtained by deflating the current prices using wholesale price indices, were utilised to identify the trend. From the analysis it can be seen that prices of all species had increased over the whole period. The period upto 1976-77 was characterised by stable prices and the increase was marginal. A sharp increase in prices for all species was noticed during the period 1976-77 onwards. Both changes in supply and demand seem to influence the prices. The average annual supply of timber has declined to 69 per cent between the periods 1968-69 to 1976-77 and 1977-78 to 1981-82. While supply has declined internal demand has increased, primarily due to growth of the construction activity as indicated by the increase in the number of buildings. Price expectation during sales to consumers seems to be an important factor that determines bid prices. Price expectation, however, depends upon anticipated demand and expected supply. During the period 1976-77 onwards, not only that demand has increased but also supply has declined, and both have cumulatively contributed to a rapid price increase. On the basis of the circle-wise real prices of timberfor the period 1975-76 to 1981-82, it can be observed that for certain species the prices were consistently high in some circles for most of the years while for some others, such a consistent trend was not noticeable. Local preferences developed over time, availability etc. seem to be the most important factors affecting such regional variation in prices