Impact of increases in fertilizer prices on long term-term economic vialibility of palm oil production

by mpob_admin

Surges in fertilizer prices in recent years have led to a sudden increase in the production cost of fresh fruit bunches (FFB) of oil palm as the share of fertilizer cost in the overall field cost has escalated from 30%-35% in 2007 to as high as 50% in 2008. This phenomenon created concerns among industry members because net revenue from FFB production was cost-squeezed to payback the initial capital outlay and to finance field operations. Increases in fertilizer prices can affect investment viability and the economic attractiveness of oil palm planting and replanting. This article attempts to give an overview of and evaluate the impact of rising fertilizer prices on the long-term viability of palm oil production in Malaysia. Evaluation of various scenarios of fertilizer price increases on investment payback period and on production cost (per hectare and per tonne of FFB), as well as the determination of threshold crude palm oil (CPO) prices for viable cultivation and replanting of oil palm were undertaken using system dynamics – a programmable master schedule known as e-FA (e-Fertilizer Application).

Peningkatan harga baja secara mendadak sepanjang tempoh 2007-2008 telah menyebabkan peratus kos pembajaan dalam keseluruhan kos pengeluaran buah tandan segar (BTS) meningkat dari 30%- 35% pada tahun 2007 kepada 60% pada tahun 2008. Fenomena ini telah menyebabkan industri sawit negara mengalami kemerosotan pulangan akibat pengeluaran BTS terjejas untuk membayar balik pelaburan awal dalam pembangunan lading atau penanaman semula dan juga untuk membiayai kos operasi di ladang. Artikel ini bertujuan untuk memberi perspektif ekonomi kesan peningkatan harga baja ke atas daya saing pengeluaran minyak sawit untuk tempoh jangka panjang. Beberapa senario peningkatan harga baja dan kesannya terhadap pulangan pelaburan, kos pengeluaran BTS serta tahap harga minyak sawit mentah (MSM) yang berdaya maju telah dianalisis dengan menggunakan analisis kos faedah.

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