ICAEM2016
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The 8th International Conference on Agribusiness Economics and Management The Apo View Hotel, Davao City, Philippines 26–28 October 2016
UP School of Management
CITATION Guigue, Gemma M.. 2016. “Supply Chain Analysis of Prawn in Misamis Occidental, Philippines.” Paper presented at the 8th International Conference on Agribusiness Economics and Management, Davao City, Philippines, 26–28 October 2016.
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SUPPLY CHAIN ANALYSIS OF PRAWN (Penaeus monodon Fabricius) IN MISAMIS OCCIDENTAL, PHILIPPINES
GEMMA MORANTE GUIGUE School of Agriculture, Northwestern Mindanao State College of Science and Technology Labuyo, Tangub City, Misamis Occidental, Philippines 7214
Background of the Study Penaeus monodon, a giant tiger prawn or sugpo, Lukon or pansat, is the biggest of the penaeid group (500-600 gms offshore catch) or 30-60gm/ piece at intensive farming. Prawns or “Sugpo” have a universal appeal not just here in the Philippines, but globally. Tiger prawn (Penaeus monodon Fabricius) or sugpo culture is one of the most profitable industries in Region 10. It has significant economic contributions to the region as it encourages employment and generates foreign currency (BAR 2012, Vol. 2 page no. 19-20).
However, certain inefficiencies along the supply chain hinder the industry to reach its full production and market potential. In order for the industry achieve its optimum potential there is a need to examine and analyze the dynamics of the supply chains and assess the gaps along these chains.
Objectives of the study This study analyses the existing supply chains of the prawn industry in Misamis Occidental, Philippines. Specifically, the study sought to provide an overview of the situation of prawn growers and traders in the province for a better government support and to enable sustainability in the supply chain.
METHODOLOGY Locale of the Study The study covered the major areas in the province of Misamis Occidental where prawns are most abundant. The areas included were located along the Panguil Bay in Bonifacio, Tangub and Ozamis.
Established methods in supply chain studies Tracer method using structured survey questionnaire Focus Group Discussion (FGD) Descriptive statistics and sensitivity in supply chains studies were also utilized
RESULTS AND DISCUSSION
Overview of the Prawn Industry in Misamis Occidental Prawn production in Misamis Occidental begins to increase starting March and reach its peak during the months of July then eventually declines on the month of December. The decrease of the volume of supply is due to unfavorable weather condition which includes heavy rains and typhoons. This continuous heavy rainfall causes overflowing or flooding which greatly damage fishpond dikes causes the decline of the supply of prawn in the local market and foreign market as well. Prawn production in the province of Misamis Occidental peak reaches during the 3rd quarter of 2012 and very low production in the 2nd quarter of 2013.
Figure 2. Annual trend in the volume of prawn production in metric tons, Northern Mindanao, 2009 to 2013 (Source: BAS)
Figure 3. Annual trend in the value of prawn contribution in the fishery exports by province, Northern Mindanao, Philippines 2009-2013 (Source: BAS)
Percent Contribution of Top Fishery Export Commodities to Total Export Value, Philippines, 2012 Octopus 3%
Others 15% Crab, Crab fat & meat 8% Grouper, live 3%
Tuna 46% Seaweeds 19% Squid & Cuttlefish Shrimps & Prawns 4% 2% Others
Crab, Crab fat & meat
Grouper, live
Seaweeds
Shrimps & Prawns
Squid & Cuttlefish
Tuna
Octopus
Figure 4. Percent Contribution of Top Fishery Export Commodities to Total Export Value, Philippines, 2012. (BAS)
Supply Chain Map of Prawn Industry Product, Information and Payment Flow in the Supply Chain
Figure 5. General Framework of supply chain of prawn industry in Misamis Occidental, Philippines 2014
illustrates the exchange of product and payment, how information were disseminated and how product was brought from a point of production (farm site) to a point of consumption (end-user) by each of the supply chain node of prawn industry in Misamis Occidental.
Table 1. Summary of the average volume traded and average retail price in each node of Misamis Occidental, Philippines, 2014 (Dec-2013-March-2014).
INDUSTRY PLAYERS or DISTRIBUTION CHANNELS
TOTAL PRODUCTION VOLUME BY SUPPLY CHAIN NODE **BONIFACIO CHAIN TANGUB CITY CHAIN OZAMIS CITY CHAIN (Kg) ( (Kg) (Kg)
TOTAL (Kg)
AVERAGE (Kg)
75
95
50
220
73.33
110
87.4
130
327.4
109.13
Local traders to wholesalers
40
35
50
125
41.67
Local traders to viajeros
30
20
15
65
21.67
Viajeros to wet-market vendors
45
25
40
110
36.67
TOTAL (Kg)
300
262.4
285
847.4
-
AVERAGE PRICE/KILOGRAM
300
300
300
-
-
Prawn growers to local traders Prawn growers to wholesalers
* Average retail price per kilogram regardless of the classification
** Uses green-technology by integrating saline-tolerant tilapia/bangus in prawn culture
Performance Analysis of Key Players Average Cost and Return Analysis on Prawn Growers and Traders Table 2. Summary on the average cost and returns analysis of prawn growers in Misamis Occidental, 2014 (Dec. 2013-March-2014) ITEM
BONIFACIO
TANGUB CITY
OZAMIS CITY
TOTAL
Volume Traded
185
182.5
180
547.7
Price/Kg
300
300
300
900
55,500
54,720
54,000
164,220
54,740
Cash Costs
37,200
36,800
36,300
110,300
Imputed Costs
15,625
15,472
15,400
52,825
52,272
51,700
46,497 156,797
36,766.67 15,497 52,265.67
18,200
17,920
17,700
53,820
17,940
2,675
2,448
2,300
7,423
2,474.33
300
300
300
900
285.54
286.42
287.22
859.18
286.39
Net income/Kg
14.46
13.58
12.78
ROE
5.06
4.68
4.49
40.82 14.23
ROI
90.67%
85.85%
85.19%
261.64%
13.61 4.74 87.21%
Gross Income
AVERAGE
182.5 300
Cost/Expenses
Total Costs Returns above cash cost Net returns Average price/ kilogram Cost/Kg
300
Table 3. Summary on the average cost and returns analysis of prawn traders in Misamis Occidental, 2014 (Dec. 2013-March-2014) Item
Local Trader (Good & Local sizes)
Gross Income
Wholesaler (Good Size)
Viajeros (Local Size0
Wet-market-vendor (Local Size)
80,890
196,618.5
42,000
59,500
66,600
159,894.15
33,600
51,000
5,780.14
15,508.10
3,024
1,785
72,380.14
175,402.25
36,624
52,785
8,509.86
21,216.25
5,376
6,715
Income per kg
364.37
450
300
350
Cost per kg
326.04
401.44
261.6
310.5
Net Income per kg
38.33
48.56
38.4
39.5
ROE
11.76
12.10
14.68
12.72
Less: Marketing Cost Transaction Cost Total
Net Returns
Efficiency on Supply Chains Table 4. Supply chain efficiency of Misamis Occidental, Philippines, 2014 (Dec. 2013-March-2014 SUPPLY CHAIN PLAYERS
BONIFACIO Cost (Php/Kg) 1,805.00
TANGUB Cost (Php/Kg) 1,752.00
OZAMIS Cost (Php/Kg) 1,745.00
AVERAGE Cost (Php/Kg) 1,767.33
Prawn Growers Prawn Growers Production Cost Transaction Cost Sub-Total
201.85 16.48 218.33
188.04 16.45 204.50
190.56 13.33 203.89
193.48 15.42 208.91
Wholesaler Wholesaler Marketing Cost Transaction Cost Sub-Total
395.00 41.83 436.83
352.00 41.83 393.83
345.00 22.82 367.82
364.00 35.49 399.49
Local Trader Local Trader Marketing Cost Transaction Cost Sub-Total
300.00 13.40 313.40
300 41.83 341.83
300.00 13.40 313.40
300 22.88 322.88
Viajeros Viajeros Marketing Cost TransactionCost Sub-Total
240.00 21.60 261.60
240.00 21.60 261.60
240.00 21.60 261.60
240 21.60 261.60
Wet Market Vendors Wet vendor Marketing Cost Transaction Cost Sub-Total
300.00 10.50 310.50
275.00 10.50 285.50
300.00 10.50 310.50
291.67 10.50 302.17
1,540.66 264.34 1,436.85 14.64 93.26
1,487.26 264.74 1,355.05 15.11 91.11
1,457.21 287.79 1,375.56 16.49 94.40
1,495.00 272.29 1,389.16 15.41 92.92
Supply Chain Revenue
Total supply Chain Cost Supply Chain Surplus Potential Supply Chain Cost Profit /Surplus Margin Supply Chain Efficiency
Summary of Prawn Industry Players’ Performance Table 5. Supply Chain Key Player’s Over-All Performance in Misamis occidental, Philippines, 2014
PEFORMANCE INDICATOR
Prawn Producers Mean
Efficiency Flexibility
Prawn Traders
Descripti Mean on 92.92
2.83
Descripti on
3.53
High
4.22
High
4.01
High
Moderate Responsiveness
3.42 Moderate
Product and Process Quality
3.05 Moderate
Over-all performance of producers and traders in terms of efficiency, flexibility, responsive and quality in the supply chain of prawns. Prawn traders live up to their high extent of performance, Prawn farmers maintained a moderate extent of performance in their distribution of prawns in the supply chain.
Critical Logistic Issues and Problems/Inefficiencies Environmental concerns pollution, and bad weather condition lead to an emergency harvest thereby resulting to a decrease in production which affects the price and the income. Certain inefficiencies asymmetric market information, poor farm to market road, lack or absence of market weight standards, High transaction cost Determination of the selling price is based on average body weight (ABW)
Conclusion Prawn industry lucrative, dollar-earner and profitable it encourages employment and generates foreign currency one of the top fishery commodities being exported by the Philippines but it is alarming because of the huge reduction of potential culture area due to environmental issues.
The prawn industry players prawn growers, traders and consumers. Prawn traders were rated high in flexibility, responsiveness and concern on product and process quality compared to prawn growers. Traders reap the benefits of being the upper hand in the industry key players Prawn growers was found to be the weakest players in the chain. Among the prawn supply chains in Misamis Occidental Ozamis City supply chain is found to be the most efficient Bonifacio is the most profitable supply chain Tangub is the least efficient
Recommendations Based on the foregoing analysis of the supply chains, logistics issues identified and inefficiencies, the following recommendations are forwarded:
1.Producers shall be empowered to push for standardized price determination. 2. Employ more labor on purpose solely for sorting.
3.Strengthened government programs through agri-fishery infrastructures Training, financial and technical assistance on production and water pollution management Promote and support green-technology by integrating saline-tolerant tilapia/bangus in prawn culture Organize cooperative Have market-oriented framework of development Strongly rationalize fisheries ordinances with implementation of FAO 166.
Thank you…
