Investigations into the Pomelo Supply Chains in the Mekong Delta in Vietnam. By Robert Nissen 1 , Nguyen Duy Duc 2 , Nguyen Minh Chau 3 , Nguyen Trinh Nhat Hang 2 , Do Minh Hien 3 ,Nguyen Thanh Tung 3 , Vo Huu Thoai 3 , Doan Huu Tien 3 , Nguyen Minh Tuan 3 , San Tram Anh 2 , Tran Thi Kim Oanh 2 , Vu Cong Khanh 2 , Ngo Van Binh 2 , Tran Thi Ngoc Diep 2 . 1 Queensland Department of Primary Industries and Fisheries (DPI&F) , Maroochy Research Station, PO Box 5083 SCMC, Queensland, Australia, 4560. 2 Southern Sub-Institute of Agricultural Engineering and Post-Harvest Technology (SIAEP), 54 Tran Khanh Du Street, District 1, Ho Chi Minh City, Vietnam. 3 Southern Fruit Research Institute (SOFRI), Long Dinh-Chau Thanh, P0 Box 203 My Tho Tien Giang, Vietnam. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 2 © The State of Queensland, Department of Primary Industries and Fisheries 2008. 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Reproduction of materials in this information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 3 Table of Contents Introduction 5 Methodology 5 Results 5 Overview and Background 5 World Production of Grapefruit and Pomelo 5 Pomelo:- Botanical description Error! Bookmark not defined. Vietnam Country Overview 7 Pomelo Varieties of Vietnam 8 Pomelo Variety Nam Roi 8 Pomelo Variety Da Xanh 8 Pomelo Variety Long Hong 9 Pomelo:- Climatic Requirements 10 Pomelo Production in Vietnam 11 Pomelo Production (yield) 13 Consumers 18 Retailers 20 City Retailers (Ho Chi Minh & Hanoi) 20 Hawkers and Street Vendors 20 Supermarkets 20 Retailers (Fruit Shops) 21 Provincial Retailers 21 Local Retailers 21 Fruit Losses During Retailing 22 Retail Prices 22 Restaurants, Hotels and Tourists Resorts 23 Wholesalers 24 Collectors/Traders/Packing Agents 28 Collector 28 Traders/Enterprises (Companies) 29 Enterprises (Companies) 31 Local Packing Agents 31 Trader/Collectors/Packing Agent Transportation and Packaging Methods 32 Trader/Collectors/Packing Agent selling price 33 Farmers 34 Orchard Location and Size 34 Productivity and Yield 34 Orchard Establishment and Development 34 Orchard Management 34 Harvesting 35 Shelf life of pomelo fruit 35 Grading and sorting on farm 35 Grading: 36 Packaging 36 Farmer selling methods 37 Method 1. 38 AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 4 Method 2. 39 Method 3. 39 Economics and Market information (Price) 39 Pomelo Yearly Average Farm Gate Price in MRD 43 Comparison of the seasonal average farm gate price for 2006 for the pomelo variety Nam Roi between the provinces of Tien Giang and Vinh Long province in MRD 43 Comparison of the seasonal average farm gate price for 2006 for the pomelo variety Da Xanh between the provinces of Tien Giang and Vinh Long in MRD 44 Comparison of the seasonal average farm gate price for 2006 by variety in MRD 45 Comparison of pomelo farm gate price to wholesale and retail market prices 46 Supply/Value Chain ANalysis 47 Supply/Value Chain Channel 1 50 Supply/Value Chain Channel 2 51 Supply/Value Chain Channel 2 (a) 51 Supply/Value Chain Channel 2 (b) 51 Supply/Value Chain Channel 2 (c) 52 Supply/Value Chain Channel 3 52 Supply/Value Chain Channel 4 53 Discussion and Conclusions 55 References 57 AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 5 INTRODUCTION This report provides baseline information on investigations undertaken as part of the Collaboration for Agriculture and Rural Development CARD Project 050/04VIE “Improvement of export and domestic markets for Vietnamese fruit through improved post-harvest and supply chain management”. This collaborative project is funded by AusAID and administered by Hassall and Associates International. The project is between the Queensland Department of Primary Industries and Fisheries (QDPI&F) and the Vietnamese organisations, Southern Sub-Institute of Agricultural Engineering and Post-Harvest Technology (SIAEP), and Southern Fruit Research Institute (SOFRI). The aim of this report is to investigate and understand pomelo supply chains in Mekong Delta, Vietnam by: • determining pre- and post-harvest technology practices of these supply chains • determining the quality of the product produced by these supply chains • identifying participants in the existing domestic and export supply chains • map the existing mango supply chains and their and distribution channels METHODOLOGY Several methods were used to collect baseline data on pomelo supply chains operating in the Mekong Delta of Vietnam. Relevant data and information was collected from the internet and reports produced by the Ministry of Agriculture and Rural Development (MARD), The Government Statistics Office (GSO) of Vietnam, and provincial government offices in the Mekong Delta, Vietnam. Further information was obtained from the internet and published reports and databases of the Food and Agricultural Organisation (FAO) of the United Nations, World Bank Vinh Long, DARD and Institute of Agricultural Planning & Designing. Survey sheets and process analyses were developed and tested by Vietnamese project staff. The supply chain was segmented into the various supply chain participant groups; wholesalers, traders, farmers and one company. Investigation was carried out via interviews and surveys with wholesalers, traders and farmers along the pomelo supply chains operating in the Bin Minh District and Vinh Long Province, Cai Be District, Tien Giang Province, in Vietnam in July 2005 to May in 2006. Interviews were conducted with: • 20 Nam Roi pomelo farmers at Binh Minh District and Vinh Long Province • 9 Nam Roi pomelo traders at Binh Minh District and Vinh Long Province • 4 Nam Roi pomelo wholesalers at Cai Be District, Tien Giang Province • 1 Nam Roi pomelo exporting & processing Co. at Binh Minh District and Vinh Long Province. RESULTS OVERVIEW AND BACKGROUND WORLD PRODUCTION OF GRAPEFRUIT AND POMELO Pomelo belongs to Citrus maxima or Citrus grandis. Pomelo is a native to Southeast Asia and is widely cultivated in Malaysia, China, Vietnam, India, Thailand, Indonesia and other Asian countries. Pomelo is the AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 6 third largest fruit exported from Thailand and accounts for 11% of total fruit exported. FAO statistical data on pomelo production in the world does not exist, but data on the world production of pomelo and grapefruit does. World production of pomelo and grapefruit peaked in 2000, with 5.4 million tonnes produced. Over the next three years production steadily decreased before rising slightly in 2004 then dropping sharply to 4 million tonnes in 2005. Since then, production has increased rapidly to about 5.1 million tonnes in 2007, see Figure 1 (FAO Stats 2003). Year 2000 2002 2004 2006 Tonnes (thousnads) 3800 4000 4200 4400 4600 4800 5000 5200 5400 5600 Figure 1. World pomelo production from 1999 to 2004. Source: FAOSTAT 2008. The United States of America is the largest producer of grapefruit and pomelo in the world, closely followed by China and then South Africa (Table 1). In 2006, the Ministry for Agriculture and Rural Development (MARD) indicated there was 30.4 thousand hectares of pomelo, producing 242.2 thousand tones of marketable fruit in Vietnam. Malaysia harvests a yellowish pear shaped pomelo all year round while those from Thailand have a green skin colour, are round and available from June-October. China exports pomelo in small quantities, mainly to Hong Kong, about 420 tonnes in 1999 and 3828 tonnes in 2000 (Hien &Tung, 2006). In 2004, Japan was reported to be the largest importer of pomelo in the world with 288 000 tonnes, followed by Canada, 51 000 tonnes and Russia, 46 000 tonnes (Hien &Tung, 2006). AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 7 Table 1. Top Ten Grapefruit Producers (inc. pomelos) — 11 June 2008 VIETNAM COUNTRY OVERVIEW Vietnam is socio-economically dependent on agricultural production. About 85% of Vietnamese households are involved in some way in vegetable, fruit and flower production. These people, especially the farmers, are experiencing dramatic changes in moving from a centrally-planned to a market-orientated economy (Nguyen Dinh Hung, et al., 2004). Following key reforms through the renovation strategy “doi moi” implemented in 1986, the country has made remarkable progress across a broad range of socio-economic development measures. For example, the poverty rate dropped from 58.1% in 1993 to 19.5% in 2006 but rural poverty rates remain high at 29% (Swinkels and Turk, 2006; Vietnamese Academy of Social Sciences Vietnam, 2007). Much of the poverty reduction in Vietnam can be traced to the high annual economic growth combined with integration into international markets, increasing agricultural exports, investments in infrastructure and policies that encourage agricultural and rural development (FAO; 2003). Agriculture's share of economic output has continued to shrink, from about 25% in 2000 to 20% in 2006 and 19.4% of Gross Domestic Product in 2007 (CAI World Factbook 2008.) Vietnam’s main export horticultural products are cabbages and spicy vegetables; mango, dragon fruit, pomelo and litchi. Vietnam’s main export markets are currently Taiwan, China, Hong Kong, Malaysia, Singapore and Indonesia (Phan Thi Giac Tam, et.al. 2005). Food safety and product quality requirements in these markets are not as strict as the European markets. Vietnamese feel they are facing saturated Asian markets; therefore a few Vietnamese exporters have made their best efforts to penetrate into and Country Production (Tonnes) Footnote United States 1580000 People's Republic of China 547000 F South Africa 430000 F Mexico 390000 F Syria 290000 F Israel 245000 * Turkey 181923 India 178000 F Argentina 176000 F Cuba 175000 F World 5061023 A No symbol = official figure, P = official figure, F = FAO estimate, * = Unofficial/Semi-official/mirror data, C = Calculated figure A = Aggregate(may include official, semi-official or estimates); Source: Food And Agricultural Organization of United Nations: Economic And Social Department: The Statistical Division AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 8 enhance their markets in Europe. The Vietnamese producers and exporters’ of pomelo, awareness and application of the key food safety and quality requirements have increased significantly since 2000 and are now being applied to the production and export of pomelo. Some farmer/exporter groups have obtained EUROGAP 2 Certification for the export of pomelo into Europe. POMELO VARIETIES OF VIETNAM There are many pomelo varieties in Vietnam. In Northern Vietnam the pomelo varieties grown are, Dao, Kha, Linh, Suu, My and Dien. In Central Vietnam, Thanh Tran and Dao are the main varieties grown in backyard gardens and not commercially farmed. In Southern Vietnam the pomelo varieties, Thantra, De Xanl, Nam Roi, Duong Da Lang, Dung La Vam, Da Xanh, and Long Da Lang are grown in orchards. N AM ROI The pomelo variety Nam Roi is famous in Vietnam because of its special fruit qualities; it is seedless, pear shaped and has yellow coloured flesh that is crisp and sweet. Average weight is approximately 0.9-1.45 kg/fruit. Fruit skin colour when ripe, is a green-yellow to a bright yellow. The average thickness of the Albedo layer is about 15-18mm. Flesh colour is a light yellow and is easily separated from the segment. Flesh has a rich sweet sour taste. The average Total Soluble Solids of the flesh is about 9-11 o degree Brix. Flesh has a sweet smell with 0-10 small seeds per fruit. Flesh recover ratio is greater than 50% of the total weight. Nam Roi variety is highly sought after, especially during festival periods and family occasions in Vietnam (Figure 2). Figure 2. Nam Roi pomelo variety DA XANH Da Xanh has round shape, green skin colour and pink flesh that is crisp and sweet and also sought after by the Vietnamese (Figure 3). The average fruit weight is about 1.5kg/fruit. Fruit has a yellow green skin colour and is easy to peel. Flesh is a rosy red colour and separates easily from the segment. When eaten, flesh has a sweet smell, rich sweet taste with no detectable acidity on the palate. Da Xanh fruit have many seeds, about 10-30 large seeds per fruit. Flesh weigh recovery ratio is greater then 55%. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 9 Figure 3. Da Xanh pomleo variety. LONG HONG It is reported that this variety has a lower quality when compared to Da Xanh and Nam Roi. This variety is higher yielding and highly tolerant of pest and diseases. Trees of Long Hong pomelo variety are vigorous, woody tree with a rounded canopy (Figure 4). Trees start bearing 2.5-3 years after planting. Long Hong produces fruit all year round, but the main season is from August to December. From flowering to harvest takes about 7-7.5 months. Seven year old trees produce about 100 fruit per tree and the average fruit weight is about 0.9-1.5kg/fruit. Fruit are pear shaped, with a yellowish green skin colour and are easily peeled and have about 20 -30 seeds/fruit. Flesh colour is pinkish in colour, juicy with a slight bitter taste and a good sugar acid balance. AusAID CARD Project 050/04 VIE Improvement of domestic and export markets through improved post harvest and supply chain management January 2008 Page 10 Figure 4. Long Hong pomelo variety POMELO:- CLIMATIC REQUIREMENTS Pomelo is a tropical region fruit and performs best in the lowland tropical areas of South East Asia. The temperature requirement for optimum growth is between 23 to 30 o C and optimum light requirement is 32.3 to 86.1 Klux with an annual rainfall between 1500 to 1800 millimeters per year. Pomelo trees perform best in a soil type that is a loam or sandy loam with depth greater than 1.0 meter. The pH range of the soil should be from 5.5 to 6.5. Water logged or heavy clay soils should be avoided. [...]... Tre Provinces, of the Mekong Delta, but fruit with the highest quality, reportedly come from the Vinh Long Province In Vinh Long, pomelo production is concentrated at the Binh Minh District where the My Hoa Commune has specialized in the pomelo variety Nam Roi In Tien Giang, the pomelo variety Long Co Co is the dominant variety grown in the Cai Be District, followed by Nam Roi which is grown in the Cai... harvest and supply chain management POMELO PRODUCTION IN VIETNAM Vietnam has had a significant increase in the number of hectares planted to pomelo since 2004 In 2004 Vietnam had 25 470 hectares (ha) of pomelo and in 2006 Vietnam had 35 600 ha of pomelo This is an increase of 10,130 ha or a 39.7% in 2 years and a rate of increase of 18.2% per year compounding The Mekong River Delta (MRD) has the largest... province has the largest plantings of pomelo, with 6,600 ha planted in 2006 This accounts for 30.3% of the total area planted to pomelo in the MRD, followed by the provinces of Tien Giang with 27.1% and Ben Tre 14.7% (Figure 5) The province of Vinh Long in the Mekong Delta, southern Vietnam, has long been famous for its production of Nam Roi pomelo Nam Roi pomelo is also grown in the Tien Giang, Tra Vinh,... Area planted to pomelo in MRD in 2006 (Source: Agriculture Planning and Designing Institute) POMELO PRODUCTION (YIELD) Highest yields of pomelo are achieved in Red River Delta (RRD) and MRD According to Agriculture Planing & Designing Institute, the average yield for pomelo in VN was 11.76 tons per ha in 2006 In VN, pomelo production has seen a significant increase in the last three years In 2004, about... farmers growing other pomelo varieties such as Thanh Tra and Long In Vinh Long province, the main pomelo variety grown is Nam Roi, followed by Da Xanh, Long, Huong Dong and Thanh Tra In Vinh Long province, the total area planted to pomelo is 5 332 ha with about 50% of the plantings being in the Binh Minh District PRODUCTIVITY AND YIELD The life of a pomelo tree is about 10 to 20 years, depending upon... to the trader’s place of business to purchase fruit The majority of traders transport the fruit to the wholesaler in cities, Ho Chi Minh City, Nha Trang, Ba Ria, Vung Tau and Da Nang Of the 9 traders interviewed in Binh Minh District, Mekong River Delta, southern Vietnam, 6 of them purchase from farmers and 3 purchase from other small traders and farmers All of these traders interviewed in Binh Minh... been in this business for 5-6 years Six of these traders sell the fruit to wholesalers in HCMC, and the remaining 3 other sell to different customers at Ton That Thuyet Port in HCMC Traders indicated that the Nam Roi pomelo wholesalers at Thu Duc Wholesale Markets in HCMC are their representatives Benefits traders obtain are the linkages with these wholesalers and this is based on the fruit quantity they... loss, due to handling and loading of the fruit If wholesalers carry out the handling of the fruit from the traders place of business, the losses are lower If the trader delivers the fruit to the wholesaler, then the losses are higher The shelf life of pomelo fruit is significantly reduced if the fruit are wet or are left in the sun Wholesalers reported that pomelo preserve better than other tropical fruit... all the pomelo fruit are not sold on the same day they are kept to the next day They are not wet or kept in the hot sun but under shade Pomelo are kept and displayed in bamboo or wire baskets at the wholesale markets Wholesalers do not label pomelo fruit According to the wholesalers, their customers recognise the fruit quality and they can be trusted, therefore there is no need to place a label on the. .. Certain traders and private enterprises are applying some post-harvest practices They are now using chlorine wash to clean and sterilise fruit then dip in ethephon at 500ppm (to give fruit and even yellow colour) and wrap in polyethylene bags to reduce moisture loss and increase shelf life up to 3 months Traders are the participants in the supply chain who suffer the greatest losses in the pomelo supply . of these supply chains • determining the quality of the product produced by these supply chains • identifying participants in the existing domestic and export supply chains • map the existing. farmers along the pomelo supply chains operating in the Bin Minh District and Vinh Long Province, Cai Be District, Tien Giang Province, in Vietnam in July 2005 to May in 2006. Interviews were. Investigations into the Pomelo Supply Chains in the Mekong Delta in Vietnam. By Robert Nissen 1 , Nguyen Duy Duc 2 , Nguyen Minh Chau 3 , Nguyen Trinh Nhat Hang 2 , Do Minh