Value Chain Analysis of Ylang-Ylang (Canaga odorata) Essential Oil in Anao, Tarlac, 2024

Date

6-2024

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Nora DM. Carambas

Committee Member

Geny F. Lapiña, Maria Angeles O. Catelo

Abstract

This study aimed to evaluate the value chain of ylang-ylang flower and essential oil products in Anao, Tarlac, focusing on identifying key actors, their roles, and practices, as well as assessing the profitability and efficiency of production, processing, and marketing. The value chain was divided into three stages: flower harvesting, essential oil extraction, and manufacturing of secondary products. Primary data were collected through a semi-structured interview process with 23 value chain key actors (17 flower pickers, one essential oil processor, two retailers, and four various manufacturers of ylang-ylang products such as perfumes, candles, car fresheners, and distilled oil). Descriptive analysis, profitability analysis, and marketing efficiency analysis were employed to evaluate the value chain. The pickers' procedure involved harvesting and delivering flowers to the Ylang- ylang Center for sorting and distillation. The study found that between April 2023 and April 2024, 1,192 kilograms of flowers were sold to the local processing facility, yielding 7,150 milliliters of essential oil. Product and geographical flow analyses illustrated direct consumer purchases, retail sales, and supply to secondary product manufacturers from Anao to several areas in Luzon. On the other hand, profitability analysis revealed that all key actors in the value chain were profitable, with flower pickers receiving the lowest return on investment due to relatively high implicit costs. The processor, manufacturers, and retailers, however, showed significant positive returns surpassing the opportunity cost of capital investment, with manufacturers adding the most value. The candle manufacturer earned the highest value-added share, followed by car freshener, distilled oil, and perfume manufacturers.

Inefficiencies particularly existed in the distribution of returns and technical operations. Marketing margins revealed disparities, with pickers receiving minimal shares and manufacturers the highest, and the assessment of the breakdown of consumer’s peso indicated that flower pickers received the smallest share of consumer spending, suggesting inefficiencies in the value chain. Technical efficiency analysis exposed a five percent CAP value, which implied inefficiency and underutilization of the processing facility, indicating room for improvement.

In conclusion, the ylang-ylang value chain in Anao, despite the inefficiencies in certain stages, exhibited profitability among key actors, with manufacturers reaping the most benefits. Key challenges identified included a lack of blooming trees, insufficient training for pickers, overharvesting, low farmer engagement, inconsistent processing methods, lack of competitive pricing strategies, and difficulties in promoting ylang-ylang products. Recommendations to address these challenges, like the provision of appropriate training programs for flower pickers and the employment of new pricing and marketing strategies, could enhance the sustainability and competitiveness of the ylang-ylang essential oil industry and improve the value chain's overall efficiency and the value chain key actors’ profitability.

Language

English

LC Subject

Oil fields, Valuation

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2024 A14 D39

Notes

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Document Type

Thesis

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