Economic feasibility and rotation age for stands of candeia (Eremanthus erythropappus)

Abstract

Cultivation of nonnative candeia is an alternative way of obtaining raw material to meet the market demands for essential oils and fence posts. A successful stand is conditional on careful planning intended to optimize activities and make the project economically feasible. The objective of this study was to analyze the economic feasibility and to determine the economic rotation age for stands of candeia (Eremanthus erythropappus) using different interrow spacing arrangements, as well as to analyze the sensitivity of both economic indicators for candeia and economic rotation to variations in cash flow variables. Equivalent Annual Value (VAE) was the method used for the economic analyses. A simulation was carried out to detect VAE sensitivity to changes in variables related to cash flow. It was concluded that candeia cultivation can be profitable when spacing arrangements are 1.5 x 2.0 m or more. Arrangements denser than that are economically unfeasible for the ages being analyzed. Among the analyzed spacing arrangements, 1.5 x 3.0 m was found to be the most profitable and less risky. The economic rotation age for candeia is 15 years using 1.5 x 1.5 m spacing; 13 years using 1.5 x 2.0m and 1.5 x 2.5 m spacing; and 12 years using 1.5 x 3.0 m spacing. Proportional variations in timber price, volume output and interest rate implied inversely proportional variations in economic rotation for the spacing arrangements being studied. Conversely, proportional variations in seedling price implied directly proportional variations in rotation. Changes in land price did not affect economic rotation for any of the spacing arrangements.