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Strategy for fertilizer management during low commodity price

Caliman J.P., Hardianto J., Milton N.. 2001. In : MBOP. Cutting-edge technologies for sustained competitiveness. Agriculture conference : Proceedings of the 2001 PIPOC International palm oil congress, 20 - 22 August 2001, Mutiara Kuala Lumpur, Malaysia. Kuala Lumpur : MPOB, p. 295-312. MPOB International Palm Oil Congress (PIPOC), 2001-08-20/2001-08-22, Kuala Lumpur (Malaisie).

The price of crude Palm Oil (CPO) has shrunk by 66% during the last thirty months from a peak monthly average value of USD 705 / tonne recorded in May 1998 to below USD 230 / tonne in November 2000. This dramatic decline has in some cases brought the commodity close to breakeven in regard to profitability. Fertilizer represents the largest, single component of production cost. In order to ensure satisfactory cash flow and acceptable profitability in both short and medium term, plantation companies may need to review their strategies for estate management and aim at reducing production costs in response to lower commodity price. Through typical examples, the presentation will show how the methodology used for the mineral nutrition management, based on the analysis of yield and leaf content response curves to the rate of fertilizer applied, makes it possible to adjust the nutrition of the palms in order to achieve the maximum economical yield in such a situation. A sensitivity analysis shows the impact of CPO price level on the optimum leaf content value for each nutrient and its corresponding application rate of fertilizer. Differences of sensitivity between fertilizers are confirmed. This kind of analysis provides a useful decision support tool for plantation management. Significant differences between very young and adult palms emerge. On adult palms, the shape of the response curve generally observed provides opportunities to improve productivity as slight reductions in fertilizer rates have little impact on the yield achieved. On very young palms, the more linear relationship between the yield, growth and nutritional status of the palms indicate the undesirability of reducing the fertilizer regime, as such an action will have significant adverse impact on the palm performance. Price forecasting over a 2-3 years period is both a key issue and a difficult task for decision-making relating to fertilizer management of a perennial crop such as oil palm. Several strategies for fertilizer policy, matched with possible scenarios of CPO price trends, are presented. Opportunities for optimizing agricultural practices directly related to mineral nutrition management (fertilizer efficiency, by-product valorization, etc...) are also proposed and discussed. (Résumé d'auteur)
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