Reasons for the rise in the price of coal for hookah in 2021

Hookah charcoal price increase: causes and consequences. By Ivan Malik, GreenPower ™ founder.

Ivan Malik, founder of GreenPower, is currently on a working visit to Indonesia.

He told about the reasons for the shortage of hookah charcoal.

The most basic reason is that the Indonesian authorities have lifted the moratorium on the export of raw coconut from the country. And entrepreneurs from China began to actively expand the new market.

Hookah charcoal is made from ripe coconut shells, which are previously removed from the tree. In an unripe fruit, the shell has not yet been formed and is not suitable for high-quality hookah charcoal.

The second reason is the coronavirus epidemic, which has suspended the development of economies around the world. The quarantine introduced all over the world has left many people without work and without means of livelihood. The sphere of the restaurant and hookah business found itself on the brink of survival – people found themselves on self-isolation and began to save money, or whoever had money, for fear of infection, stopped visiting entertainment centers.

The development of the situation was more difficult to predict than the behavior of the financial market. Lack of visitors, vacations lasting several weeks, constantly changing business conditions, and no one canceled the lease. Therefore, many entrepreneurs refused to purchase hookah charcoal.

Of course, this whole situation affected the business in Indonesia. Indonesia’s coconut processing plants are in both the red and green zones. Many were forced to close, especially those in the red zone. Some of the enterprises lost their employees for a while, who fell ill.

It was especially difficult for medium and small businesses; many enterprises have not yet been opened.

Unlike other countries in which the spread of the epidemic began to gain momentum, the Chinese quickly got sick and soon factories and plants continued their activities.

The Chinese have learned to process coconut completely, leaving no waste, producing hundreds of different products from it. For example, the fibrous portion of coconut has increased adhesion and is highly prized in mattress manufacturing.

Therefore, for many reasons, it was profitable for Indonesia to sell unripe coconut at a good price to the Chinese, taking into account all the facts – a sharp decline in demand for charcoal at the beginning of the epidemic, the closure of some processing industries, limitation of the opening hours of others, and a lack of labor.

Therefore, the market for hookah charcoal has rapidly declined. And when the need arose for charcoal, none of the existing brands was able to take out the required amount of coconut from Indonesia, a fight for raw materials began, which, accordingly, led to an increase in prices.

Accordingly, factories in Indonesia are forced to raise prices for the final product, as prices for raw materials have risen, the volume of production falls, and costs – rent, wages and other payments remain the same, plus energy prices rise. Only manufacturers who can sacrifice the price can make it by mixing in the coconut charcoal charcoal from wood, at the same time of lower quality.

Was it possible to enter new markets for hookah charcoal? The fact is that the nearby markets in Thailand, Vietnam, the Philippines have long been occupied by the Chinese. Despite the fact that coconut trees are found throughout the tropical coastline, Indonesia is the world leader in coconut production. And the three countries – Indonesia, India and the Philippines account for 72% of the world market for coconut production. The average annual growth rate of coconut plantations is 0.5% per year. At the same time, a significant part of the coconut charcoal is processed into activated carbon, which is in high demand everywhere.

It is rather difficult to predict how the situation in the world will develop further. According to some reports, the Indonesian government plans to return the moratorium on the export of raw coconut, because other industries – cosmetics and confectionery – are suffering from this.

Is there a way out of this situation?

Also has a high density: the shell of walnuts, hazelnuts, Brazil nuts, as well as seeds of fruit trees – dates, Rurikov, etc., which is an important indicator for the production of hookah charcoal. You also need to have an idea of ​​how exactly charcoal is produced in underdeveloped countries and what quality it is, and what other ways of producing charcoal are. 95% of all existing charcoal production facilities in the world are “artisanal technologies” that do not require initial financial investments, the cost of funds is initially minimal, and cheap labor is not particularly demanding on “dirty technologies” and lives by the day, issues of health and ecology of the planet generally fade into the background.

Traditionally, in Indonesia, in particular and in other countries, charcoal was obtained by the pit or heap method, or in vertical barrels from engine oil, which is not an environmentally friendly production method. , in the production of 1 ton of charcoal, 4 tons of harmful substances are released into the environment. Emissions contain phenols, acids, alcohols, resins, aldehydes, ketones and other substances. Hazardous substances enter the environment and are also inhaled by workers during production. At the same time, carbonization – pyrolysis, that is, the production of high quality charcoal, is virtually impossible using “traditional technologies”. As you know, the most important indicators in hookah charcoal are the content of non-volatile carbon and ash content, they are responsible for the duration of combustion, the absence of harmful substances, foreign tastes for the smoker. For non “traditional types” of raw materials: shells of various nuts or seeds of fruits, when using “barrels” it is virtually impossible to obtain high-quality charcoal. Therefore, they have not become widespread. For comparison, in Indonesia, the cost of a ton of hazelnut shells is half that of coconut shells. Watch a video about the production of hookah coal in Indonesia and “modern” production methods >>>.

An example of the artisanal production of charcoal that still exists in the world to this day, you can see in this video.

At the moment, the director of GreenPower, Ivan Malik, is in Indonesia with the aim of expanding production and establishing the production of charcoal in an environmentally friendly way. For 20 years, GreenPower has been producing charcoal kilns that are environmentally friendly, because thanks to the latest, patented technology, gaseous pyrolysis products provide the technological process and flue gases do not pollute the atmosphere, but enter the afterburner of the kiln to ensure an environmentally friendly and energy efficient process. In addition to this, the carbonization process generates heat energy, which can be used to support technological processes in the production of hookah charcoal, for example, for drying a briquette. BIO-kilns are fully automated and do not require a large number of maintenance personnel, while the entire charcoal production process requires no more than 3 kW / h of electrical energy.

In addition to carbonization furnaces, GreenPower offers hookah charcoal briquetting lines, including crushers and dryers.

Ivan Malik, General Director of GreenPower, sees a way out of this situation in the following measures: