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CLSU 2003-05: Analysis of the Price System and Trade Related Concerns of Philippine Mango

The study focused on understanding the price system and trade related concerns for Carabao mango in the Philippines and export markets in Hongkong and Upper China, as well as an assessment of its prospects in emerging markets of Asia and Europe. Pangasinan, Zambales and Davao del Sur were the sites for the primary supply data, while Metro Manila and Cebu were the sites for the primary demand data. A more flexible distributive lag model was specified for both the long run supply and demand models, in addition to the inclusion of climatic and technological factors. Preliminary results for the short and long run supply findings show that all coefficients in the model conform with economic theory and expected behavioral relationships and were all found to be inelastic in both provinces, except for the price of flower inducers in Pangasinan in the short run. The most significant contributors to supply of mango in Pangasinan were average price of flower inducers, lag price of mango, weighted average price of fertilizers and labor for weed control. While amount of rainfall and lag price of mangoes were significant and the highest contributors to the quantity harvested in the current season in Zambales in the short run. The real producer price of mango which Pangasinan farmers considered important in increasing the mango area is as far back as the 6th year. Zambales producers on the other hand, were most concerned with real producers prices of mango up to 5th year only. Results show that the elasticities of the long run model were generally more elastic than the short run model. Aggregate price of pesticides and fungicides turned out to be the highest and the most significant contributor to changes in yield Pangasinan. On the other hand, wind speed, rainfall and technology adoption were the highest contributors to yield in Zambales, contributing 29.73 percent, 11.97 percent and 1.17 percent, respectively. Trade mission to Hongkong and Guangzhou, China revealed that the only import and customs procedure for importing food items to Hongkong was a certification of fitness for human consumption from the Department of Health. Yau Ma Tei market was the major wholesale market for fruits. Furthermore, there is neither tariff nor tax imposed on food imports to Hongkong. Based on March 2002 quotation, the total cost of handling imported fruits to Hongkong is about HK$ 9,400 per ton on the average or equivalent to around Php 66,000 per ton. Prices across sizes of fresh mangoes were usually predetermined both by the exporter and consignee (importing agent) prior to the actual shipment. Normally, fresh mangoes exported in to Hongkong come in three sizes namely; small, medium and large. The price differentials across sizes ranged from HK$ 6-7.oo per carton or about HK$ 0.50 per kg. Each carton usually has a net weight of 12 kg on the average. During peak supply months (April and May) prices dropped to as low as HK$ 5.00 (or Php35.00) per kg. or about HK$ 60.00 (or Php420.00) per carton, on the average. However, during the months of February and September prices usually rise to HK$ 19.00 (or Php133.00) per kg or HK$ 225.00 (or Php1,575.00) per carton.

Central Luzon State University
Authors Keywords
Fatajo, L.; Galang, Luzviminda M.; Jamandre, Wilfred E.; Panela, L.V.; price changes; pricing strategy; mango production;
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Published in 2006 and available in the CLSU library or NO PDF AVAILABLE Downloaded 0 times since November 25, 2011
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