Economic feasibility of clonal oil palm planting material
2020
Ahmad Tarmizi Hashim | Meilina Ong-Abdullah | Zamzuri Ishak | Balu Nambiappan | Nur Nadia Kamil | Azman Ismail
Tissue culture-derived planting materials have been proven to outperform the standard dura x pisifera (DxP) materials, in which most clones have reportedly surpassed the standard DxP performance by at least 20% on average in terms of fresh fruit bunch (FFB) yield on a per hectare basis. This advantage seems to benefit the industry players as higher productivity will lead to higher income. However, the cost of producing clonal materials is considered as one of the major bottle-necks in the large scale usage of clonal planting materials in the oil palm industry. This article aims to evaluate the economic feasibility of clonal oil palm planting materials using a cost-benefit analysis. Among the financial parameters used to measure the feasibility are namely the Net Present Value (NPV), Internal Rate of Return (IRR) and payback period. Based on these parameters, the study suggests that the clonal planting material is a viable venture and worth the investment as it provides better yield, both in terms of FFB and oil yield, which translates into better returns for the industry players despite the premium price of clonal materials as compared to that of the seed-derived standard DxP.
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