WORKING PAPER

DEPARTMENT OF AGRICULTURE AND

JAPAN INTERNATIONAL COOPERATION AGENCY

Formulation Team on the Drafting of the

Strategic Agribusiness Development Plan

COMMODITY SITUATION REPORT: POMELO

Prepared by

JOSE ULYSSES J. LUSTRIA, ALDRIN G. NACIONAL, AND

ACQUILYN E. MORILLO

November 2009

____________________

Mr. Lustria is OIC-Chief, Public Investment Program Division (PIPD), Planning Service,

Department of Agriculture. Mr. Nacional and Ms. Morillo are Technical Assistants at the

PIPD.

ii

TABLE OF CONTENTS

I. OVERVIEW…………………………………………………..……….……………….. 1

A. Background………………………….…………………...……….………….…. 1

B. Contribution to the Economy………………………….……………….…..….... 1

II. SITUATIONAL ANALYSIS………………………….…………………….…..…..….... 2

A. Production………………………….……………………………….…..….….... 2

1 . World Production………………………….…………………..…..…..….…. 2

a. Major Producing Countries………………..………………….………... 2

b. Productivity and Competitiveness…………………….…..…………….. 3

2 . Domestic Production……………………………………………….………... 3

a. Major Producing Provinces………………..……………….…..…...….. 3

b. Volume, Area planted and Productivity…………………….…..…...….. 4

c. Value of Production………………………………...…….…..…………. 4

B. Supply and demand……………………………………………….…..…..…….. 6

1 . Supply ……………………………………………..………….…..….….…... 7

2 . Demand………………………….…………………………………...…....…. 7

a. World Demand(Exports) ………………………….……...……...…..…. 7

b. Domestic Demand………………………….……..………….…..…..…. 7

C. Value-Chain System………………………….……………………..….....…..… 9

1 . Input Supply Subsystem ………………………….…………………………..

9

a. Seeds and Seedlings, etc………………….…………………………….. 9

b. Fertilizer and Pesticide………………….……………………………... 9

2 . Farm Production Subsystem……………………….………………………… 9

3 . Postharvest Subsystem.……………………………..…….…..……………… 9

4 . Processing Subsystem……….…………………………….…..…...………… 10

5 . Marketing Subsystem…….…………………………….…..…...……………. 10

D. Prices……………………………………………………………………..…...… 10

1 . World Prices………………………………………………………......…..…. 10

2 . Domestic Prices…………………………………………………....….…..…. 10

3 . Price Formation / Differentiation…………………………………….…..…. 11

E. SWOT Analysis………………………………………………………………..… 11

F. Problem Tree Analysis………………………………………………………….. 12

III. SUMMARY, ISSUES AND

RECOMMENDATIONS…………………………………………………....……....…. 13

IV. REFERENCES…………….…..….………………………………………………..…... 15

V. ANNEXES………………………….…..…..….………………………………………... 16

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LIST OF FIGURES

Figure Page

1 Percentage Share of Pomelo to Total Value of Agricultural

Crops and Gross Value Output, 1998-2008………………………………...

2

2

Pomelo Top Producing Provinces (MT), 2008……………………………...

4

3

Production (MT), Area (Ha) and

Yield (Ha/MT) of Pomelo, 1998 – 2008…………………………………......

5

4

Value of Production of Pomelo (in Million Pesos),

at Constant Prices, 1998-2008……………………………………………....

6

5

Quantity of Philippines’ Pomelo Export (Kg), 1999-2007…………...……...

8

6

Quantity of Philippines’ Pomelo Import (Kg), 1998-2003…………………..

8

7

Prices and Pice Ratio of pomelo (in Pesos), 1998-2008…………………….

11

iv

LIST OF TABLES

Table Page

1 World Production of Grapefruit (including pomelo) in MT, 2007…………. 3

2 Supply and Utilization Account of Pomelo (MT), 1998-2008……………… 7

v

LIST OF ANNEXES

Annex Page

1 World Production of Grapefruit (including pomelo) in MT, 2007…………. 15

2 Supply and Utilization Account of Pomelo (MT), 1998-2008……………… 16

1

I. OVERVIEW

A. Background

Pomelo (Citrus maxima or Citrus grandis), locally called suha, lukban, cabugao or

bu-ongon is extensively grown in the country because it is widely adapted to local soil and

climatic conditions. Some of the pomelo varieties grown in the country are the Amoy Mantan,

Magallanes, Panacan, Mintal, Aroman, Sunwui Luk, and Siamese Selections (Loquias, 2006).

Other names for pomelo include pummelo, pommelo, Chinese grapefruit, jabong, lusho fruit,

pompelmous and shaddock.

Pomelo is considered the biggest among the citrus fruits, 15-25 cm in diameter and

usually weighing 1-2 kg. Its fruit is large, round to pear-shaped, and with a thick and spongy

rind. It is usually pale green to yellow when ripe, with sweet white (or, more rarely, pink or

red) flesh and very thick pudgy rind. The segments usually open at the sutures. The flesh is

commonly firm with large vesicles and with low to high juice content. It usually matures

from October to March, depending on climatic differences (PCARRD, 1982).

The pomelo tastes like a sweet, mild grapefruit. It has very little or none of the

common grapefruit's bitterness, but the membranes of the segments are bitter and usually

discarded. It is consumed fresh but the fruit can be processed into flavoring products and

juices (Loquias, 2006).

B. Contribution to the Economy

Pomelo’s share to the economy is considerably small compare to the other fruits such

as mango, banana, and pineapple. From 1998 to 2008, pomelo accounted an average of 0.046

percent to the value of agricultural crops and 0.022 percent to the gross value output of the

country. In the same period, its contribution to the economy is declining (Figure 1). This calls

for a greater consideration to tap the potentials of pomelo industry in the domestic and export

market.

2

Figure 1. Percentage share of pomelo to total value of agricultural crops and gross value

output, 1998-2008.

(Source: BAS, 2009)

II. SITUATIONAL ANALYSIS

A. Production

1. World Production

a) Major Producing Countries. FAO aggregated the pomelo data with

grapefruit. In 2007, the Philippines is the 20th

major producer of grapefruit (including

pomelo) in the world, producing 38,345 MT. In the same year, the country’s pomelo

production was 36,686 MT (BAS, 2009). Thus, in 2007, 96 percent of the Philippines’

recorded data under this category was attributed to pomelo production (36,686 MT).

From 1998 to 2007, the country’s average production was 43,323 MT. This is higher

than the average production of other top producer countries such as Bangladesh, Spain and

Jamaica (Annex 1). Note however that this figure is based on the grapefruit (including

pomelo) data.

3

Table 1. World production of grapefruit (including pomelo) in MT, 2007.

Country 2007

1. United States of America 1,580,000

2. China 540,546

3. South Africa 386,494

4. Mexico 313,497

5. Syrian Arab Republic 290,000

6. Israel 261,037

7. India 178,000

8. Argentina 176,000

9.Turkey 162,621

10. Cuba 140,000

11. Brazil 72,000

12. Tunisia 72,000

13. Sudan 68,000

14. Belize 57,015

15. Bangladesh 54,190

16. Iran, Islamic Republic of 54,000

17. Spain 50,000

18. Jamaica 43,500

19. Paraguay 39,000

20. Philippines 38,345

Others 401,073

World 4,977,318

(Source: FAO, 2009)

b) Productivity and competitiveness . As mentioned earlier, comparison of

the productivity of major producing countries cannot be ascertained since pomelo data is

aggregated with grapefruit.

2. Domestic Production

a) Major producing provinces. In 2008, Davao City (12, 372 MT), which is

the top producer of pomelo in the country, contributed 34.5 percent to the Philippine pomelo

production. Isabela (6, 917 MT) ranked as the 2nd

major producer of pomelo in the country.

Historical data (Annex 2) revealed that from 1998 to 2002, Isabela has been a

consistent top producer of pomelo, followed by Davao City. In 2003, however, Isabela has

experienced a sudden decrease in its production, making Davao City the country’s top

producer of pomelo since then. Furthermore, Davao Oriental has also shown a steady

production of pomelo while Nueva Vizcaya has recorded a fluctuating production trend.

4

Figure 2. Pomelo top producing provinces (MT), 2008.

(Source: BAS, 2009)

b) Volume, area planted and productivity. Figure 3 illustrates that volume of

production and area has shown an opposing trend. It is interesting to note that while area

planted to pomelo is increasing at an average of 1 percent, its volume of production has

recorded a negative average growth (-2 percent) from 1998 to 2008. The expansion of area

planted accompanied by decreasing volume of production have greatly affected the

productivity of pomelo. This is reflected on the declining trend of its yield.

c) Value of production. Value of production is also much affected by its

declining production. As shown in Figure 4, its value of production from 1998 to 2008 is

decreasing at an average of 2 percent.

5

Figure 3. Production (MT), area (Ha) and yield (Ha/MT) of pomelo, 1998 – 2008.

(Source: BAS, 2009)

6

Figure 4. Value of production of pomelo (in Million Pesos), at constant prices, 1998-2008

(Source: BAS, 209)

B. Supply and Demand

1. Supply

In some particular years during 1998-2003, the country is importing pomelo. Ironic as

it is, the country is exporting pomelo in the same period. However, exports on the said years

are less than one metric ton (Table 2). Further, from 2004 to 2008, the country is no longer

importing pomelo. Declining domestic demand for pomelo might have greatly influence this

phenomenon.

As mentioned earlier, production is decreasing at an average of 2 percent. Thus,

affecting the gross supply as well.

7

Table 2. Supply and utilization of pomelo (MT), 1998-2008.

(Source: BAS, 2009)

2. Demand

a) World demand (Exports). The country’s export market for fresh and dried

pomelo is not yet established. For instance, in 1999 and 2001, the country has exported fresh

pomelo in Singapore (Figure 5). However, it failed to sustain such export market in the

succeeding years. Data revealed that much are to be done in pomelo industry to enter and

compete in the world market.

b) Domestic Demand. From 1998 to 2003, the country was importing pomelo

from countries like China, USA, Thailand, Hong Kong and Singapore (Figure 6). AS

discussed earlier, there were no imports from 2004 to 2008.

Note that in the previous years (1999 and 2001), the Philippines was exporting

pomelo to Singapore. However, in 2003, the country has imported 14,450 Kg of fresh pomelo

from Singapore. Further, as shown in the supply and utilization account (Table 2), domestic

demand for pomelo is decreasing at an average rate of 2 percent.

8

Figure 5. Quantity of Philippines’ pomelo export (Kg), 1999-2007.

(Source: BAS, 2009)

Figure 6. Quantity of Philippines’ pomelo import (Kg), 1998-2003.

(Source: BAS, 2009)

9

C. Value-Chain System

1. Input Supply Subsystem

a) Seeds and seedlings, etc. Mature fruits that are free from abnormalities

are selected as source of seeds. Extracted seeds are washed several times to remove the slimy

material. Small undeveloped seeds that float are discarded. Seeds are spread thinly in

absorbent materials and allowed to air dry.

After drying, the seeds are treated with fungicides by mixing the powder with

the seed thoroughly until each seed is uniformly coated. The seeds should be sown as soon as

possible. If they are to be shipped or cannot be sown right away, they should be packed in an

airtight container wrapped in a plastic bag and kept in a cool place, preferably under

refrigerated condition (PCARRD, 1982).

b) Fertilizer and pesticide. A month after transplanting, a nitrogenous

fertilizer, such as urea, is applied evenly by hand to each plant at the rate of 50 -100 g. The

rate is increased to 200 -300 g for every plant in the second year. The said amounts should be

distributed on three applications during the rainy season. Minor fertilizer elements could be

applied directly to soil or by foliar spraying (PCARRD, 1982).

2. Farm Production Subsystem

Aside from fertilization and spraying, PCARRD (1982) also emphasized the

importance of trimming, pruning, and weeding in growing pomelo. Usually, young trees are

trimmed to have only a single trunk with three or four well-distributed primary branches.

Cultural practices for a bearing grove are also designed to obtain high yields

satisfactory quality at commercially competitive costs. Such practices include covercropping,

proper irrigation, pruning, spraying of chemicals and pesticides, and propping and

establishment of windbreaks.

3. Postharvest Subsystem

Proper handling of pomelo is as important as picking the fruit at the right stage

maturity. Fruits intended for distant transport are bought from the field to a packing shed for

sorting and packaging. Sorting is also done to separate fruits into similar sizes, color, and rind

qualities. Usually, pomelos are packed in wooden crates. These containers, although

relatively more expensive than “kaings”, offer better protection, more stability, and sufficient

ventilation. The higher cost, however, may be compensated by lesser postharvest losses and a

premium price in the market.

Appropriate container size is also important for subsequent and repeated manual

handling operations during transport. Harvesting and packaging operation is followed

immediately by prompt transport.

10

Other postharvest treatments for pomelo include fungicide application and waxing.

Waxing, although not traditionally practiced in local handling of pomelo, can greatly

minimize shriveling of fruits especially under the tropical climate (PCARRD, 1982).

4. Processing Subsystem

Pomelo can be processed into several products. It can be made into beverage, syrup,

concentrate, puree, preserves, marmalades, candies, dehydrated products, and cordials. It only

shows that opportunities abound the processing industry of pomelo providing greater value

and incentive to increase production.

5. Marketing Subsystem

In Davao City, the major production areas of pomelo are barangays in the Toril and

Calinan districts. There are also fruit coming from Panabo and Mawab in Davao del Norte

which are being supplied by large orchard owners such as Dizon Farms and TADECO.

Large orchard owners/shippers do not only operate big plantations but also own stalls

in the city proper, which serve as outlets for their produce. Aside from shipping the fruits to

Manila and Cebu, they also sell to assembler/distributor/shippers, transient traders, retailers,

and consumers in the market center. Shippers, distributors, and retailers in the trading and

market center buy fruits from medium orchard owners. For small orchard owners, their

buyers include shippers and retailers in the trading center and distributors at the assembly and

distribution areas.

At the assembly and distribution levels, assembler/distributors sell to the same set of

buyers, which include transient traders, retailers, and consumers based at their respective

areas of operation. Shippers in the trading center have only two options where to sell their

fruits - Manila buyers and consumers. On the other hand, shippers based at the market center

not only ship pomelos to Cebu and Manila, but also sell to transient traders coming to the

city to procure supplies, and retailers, and consumers in the city proper (BAS, 1992).

D. Prices

1. World Prices

As mentioned earlier, pomelo’s data are aggregated with grapefurit. Thus, comparison

of prices among top producing countries cannot be done.

2. Domestic Prices

Farmgate and wholesale prices (1998-2008) are fluctuating (Figure 7). It is interesting

to note that farmgate is higher than wholesale price. According to BAS, such occurrence is

possible in as much as only few provinces are reporting their wholesale price compared to the

provinces that are reporting farmgate price. Hence, in getting the average prices, there is

11

always a probability that average wholesale price is lower than the farmgate, especially if the

reporting provinces are the main supplier/top producer.

Figure 7. Prices and price ratio of pomelo (in Pesos), 1998-2008.

(Source: BAS, 2009)

3. Price Formation/Differentiation

For shippers of the commodity, the distributors in Manila who inform them of the

price trend in Manila do pricing. Proper pricing is usually achieved after the first shipment.

Other traders base their pricing on size, quality, and variety of fruits being traded. Some

traders claim that local consumer prefer the standard-sized pomelos which weigh from 300-

500 grams (BAS, 1992).

E. SWOT Analysis

The strengths, weaknesses, opportunities, and threats in pomelo industry are as

follows (Loquias, 2006).

Strengths

• Known for quality and high acceptability

• Widely adapted to local soil and climatic conditions

• Wide variety selection( Amoy Mantan, Magallanes, Panacan, Mintal, Aroman, Sunwui

Luk, and Siamese Selections)

Weaknesses

• Poor Insect and pest management

12

• Inefficient marketing system

• Lack of established agribusiness system

• Underplantation of pomelo

• Susceptible to patch canker and rind borers

Opportunities

• High potential for postharvest processing (flavoring products and juices)

• High potential for export trade (possible with increase in production)

Threats

• Competition from other ASEAN countries.

• Susceptible to pests such as rind borer, citrus mites and citrus scale.

• Presence of diseases caused by Phytophthora parasitica, Xanthomonas, Elsinoe fawcetti.

III. PROBLEM TREE ANALYSIS

Figure 8. Problem tree analysis of pomelo.

The issues identified in SWOT were used in the problem tree analysis. Apparently,

existence of pest and diseases greatly affects the production of pomelo. Due to limited

information regarding good insect and pest management, pomelo becomes more susceptible

13

to pests and diseases. This results in infestation of plants and fruits. Plants that are infested

would hardly bear good quality fruits. Likewise, fruits that are infested would barely grow

into the desire quality. Such instance will greatly influence the yield of pomelo. On the other

hand, low yield is not only attributed to pest and diseases. Areas that are not maximized for

pomelo planting (underplantation) reduce the chance of increasing the production.

While there are issues prevailing in the farm level production, pomelo industry is also

facing constraints in marketing the produce. Efficient marketing system has been identified

as one of the problems that are needed to be addressed. This issue, a prerequisite in

establishing a good agribusiness system, limits the market of the commodity. These

prevailing issues have hindered the expansion and development of pomelo industry both in

the domestic and export market.

IV. SUMMARY, ISSUES AND RECOMMENDATIONS

Philippine pomelo industry is beset with problems. From 1998 to 2008, volume of

production and yield of pomelo were declining despite of the increasing trend of area planted

to pomelo. Further, domestic demand for pomelo has shown a decreasing trend. Statistics also

revealed that the export market of pomelo is not yet fully established. However, there are

alternatives which can greatly develop the industry.

Contract buying is very common in the pomelo industry. This involves the sale of the

expected produce long before the expected harvest time. The buyer gets lower buying prices

to account for risks assumed. Although contract buyers perform production and marketing

services that are normally done by producers, the risk they incur by buying fruit before

harvest are more than compensated by the substantial margin in transaction. To address such

problem, it is recommended to provide extension of liberal loans to farmers to finance not

only the production but also post production expenses.

Just like the other commodities, marketing system and transaction in pomelo industry

are often complicated by the presence of different types of middlemen and operations such as

retailers to retailers, contract buyers to financier-wholesaler and others. This results in lower

in-flow for the producers or high prices for the consumers, or both. Thus, it is highly

recommended to encourage the creation of farmers’ organization to strengthen their

bargaining power and minimize the layers of middlemen. They could then deal with major

wholesalers operating within their area.

Farmers are also in disadvantaged position due to poor handling and grading methods.

Poor handling of pomelo results in losses during transit and storage. On the other hand, lack

of standards and inconsistent method of sorting are problems encountered by the farmers on

the postproduction stage. The present practice of sorting is done by producers and retailers. A

less costly method would be grading done at the producers level based on buyer’s preference.

This would result in premium prices for higher grades. Further, conduct of trainings for the

farmers will be of great help in increasing their knowledge and skills in this area.

Moreover, one of the considerations in providing a strong base for an industry is the

price. The grower must be able to sell his product at a price that is within the purchasing

14

power of the largest population segment possible. This will reverse the decreasing demand of

consumers for pomelo. Only when production is based on a wide market demand can a

sound industry grow and survive. The problems and difficulties beset by the Philippine

pomelo industry calls for a greater attention to tap the potentials of the industry in the

domestic and export markets (PCARRD, 1982).

15

V. REFERENCES

Bureau of Agricultural Statistics, Department of Agriculture (2009). Countrystat. Retrieved on

September 2009 from www.countrystat.bas.gov.ph.

Bureau of Agricultural Statistics, Department of Agriculture (1992). Marketing and

Information Needs Assessment for Davao City. Technical Report.

Food and Agriculture Organization of the United Nations (2008). Retrieved on October 2008

from www.faostat.fao.org.

Loquias, V. L. (2006), Good Agricultural Practices in Pummelo Production. Bureau of Plant

Industry - Davao National Crop Research and Development Center.

Manuel, M.V. (1980). Pomelo Marketing: Oriental Mindoro and Davao Del Sur. Special

Studies. Volume 2.

Philippine Council for Agriculture, Forestry and Natural Resources Research and

Development. (1982). The Philippines Recommends for Citrus. PCARRD Technical

Bulletin Series 42.

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VI. ANNEXES

Annex 1. World production of grapefruit (including pomelo) in MT, by top producing countries, 1998-2007.

Country 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Average

1. United States of America 2,352,000 2,279,760 2,505,640 2,233,490 2,199,020 1,871,523 1,964,056 923,510 1,117,650 1,580,000 1,902,665

2. China 253,646 310,310 268,128 323,296 356,786 400,840 433,126 444,280 495,178 540,546 382,614

3. South Africa 196,037 212,181 322,834 310,967 286,495 312,004 288,372 362,981 415,212 386,494 309,358

4. Mexico 168,282 211,498 263,126 319,793 297,638 361,494 408,953 350,199 387,339 313,497 308,182

5. Israel 377,475 372,200 246,000 329,500 251,900 255,900 235,500 263,540 266,003 261,037 285,906

6. Cuba 338,300 260,676 443,705 302,487 137,312 227,800 225,000 134,090 169,556 140,000 237,893

7. Argentina 216,073 205,270 217,905 199,489 204,751 184,162 177,210 272,704 175,000 176,000 202,856

8. India 110,000 124,000 130,000 130,000 140,000 142,000 145,000 148,000 158,000 178,000 140,500

9. Turkey 100,000 140,000 130,000 135,000 125,000 135,000 135,000 150,000 179,988 162,621 139,261

10. Brazil 65,000 65,000 66,000 66,000 67,000 67,000 67,500 68,000 71,000 72,000 67,450

11. Sudan 64,500 65,000 66,000 67,000 67,500 68,000 68,000 68,000 68,000 68,000 67,000

12. Tunisia 50,000 50,000 50,000 66,000 72,000 72,000 72,000 72,000 72,000 72,000 64,800

13. Syrian Arab Republic 0 0 0 0 0 0 0 0 290,000 290,000 58,000

14. Belize 44,954 52,953 49,766 53,001 44,762 39,205 55,966 55,440 62,807 57,015 51,587

15. Paraguay 59,952 59,790 47,869 47,967 46,663 41,327 40,290 38,200 38,015 39,000 45,907

16. Iran, Islamic Republic of 47,262 47,310 42,128 36,625 36,000 37,000 49,644 53,922 54,000 54,000 45,789

17. Philippines 46,868 48,052 46,326 43,413 45,291 43,128 41,481 40,751 38,662 38,345 43,232

18. Jamaica 42,000 42,000 42,000 42,000 42,000 42,000 43,500 43,500 43,500 43,500 42,600

19. Spain 26,016 22,623 22,965 26,472 30,855 24,738 29,771 32,727 42,467 50,000 30,863

20. Bangladesh 14,895 15,000 16,000 17,000 17,000 18,000 18,000 66,000 54,195 54,190 29,028

Others 445,357 455,671 423,282 408,268 415,573 434,936 425,345 420,926 410,180 401,073 424,061

World 5,018,617 5,039,294 5,399,674 5,157,768 4,883,546 4,778,057 4,923,714 4,008,770 4,608,752 4,977,318 4,879,551

(Source: FAO, 2009)

17

Annex 2. Volume of pomelo production (MT), by top producing provinces, 1998-2008.

Province 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Average

Davao City 9,130 10,196 10,454 11,418 12,743 13,510 13,763 14,022 14,062 12,621 12,672 12,236

Isabela 20,327 20,316 17,927 14,545 14,322 11,888 9,692 8,383 7,150 8,478 6,917 12,722

Cagayan 3,181 3,267 4,648 4,177 4,886 3,880 4,040 3,986 4,300 4,429 4,094 4,081

Nueva Vizcaya 1,064 1,896 847 1,100 900 898 861 809 870 902 1,494 1,058

Davao Oriental 971 792 744 753 755 1,064 1,061 1,266 1,271 1,271 1,229 1,016

Others 12,194 11,584 11,705 11,422 11,685 11,918 12,065 12,285 11,010 10,644 10,280 437,921

Philippines 46,868 48,052 46,326 43,413 45,291 43,159 41,481 40,751 38,662 38,345 36,686 469,034

(Source: BAS, 2009)