Some pricing issues of long-term contract log sales in Tropical North Queensland, Australia

摘要

Two main pricing issues arise when long-term log contracts are considered: sale price at the stump (stumpage), and price adjustment methods for adjusting the sale price through the duration of the contract. Efficiency in determining the log price at the stump is requisite for optimal price adjustment. While price adjustment mechanisms are addressed in this paper, the main emphasis is on the determination of the log price at the stump using Queensland Commercial Plantation forests as a case study. With one large single supplier of logs in Queensland and a few favourably-located buyers it is considered that a bilateral monopoly model is appropriate for analysing price outcomes, rent sharing and volumes supplied in the market. Prices are not determined through the market but are negotiated by the parties supplying and buying the logs.