Image: Reuters Berita 24 English - The Malaysian Palm Oil Association (MPOA) expects 52,000 migrant workers to arrive by the end of the ye...
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| Image: Reuters |
Due to a labor scarcity worsened by pandemic-related border closures, Malaysian plantations have struggled to harvest palm fruit. In Malaysian estates, foreign workers, especially from Indonesia, account for about 80% of the workforce.
The shortage has pushed production to multi-year lows at a time when the globe is experiencing a greater edible oil deficit as a result of the Russia-Ukraine conflict and export restrictions in major supplier Indonesia.
According to Reuters, MPOA Chief Executive Nageeb Wahab said the government has agreed to allow the admission of 20,000 workers whose applications were granted before the border was closed in 2020, in addition to a 32,000-worker allocation to address the ongoing labor need. Some employees have already arrived.
"We're already in a bad scenario," Nageeb said, estimating a current labor shortfall of more than 100,000 people. "I believe we'll see a large influx of workers by July."
In April 2020, the sector employed up to 337,000 migrant workers, but many of them returned home, and fresh arrivals were prohibited due to the epidemic. Malaysia has reopened its borders and allowed workers to enter since last month.
Despite the surge of personnel, Nageeb maintained his production prediction for 2022 at less than 19 million tonnes, compared to 18.1 million tonnes last year, due to heavy losses already this year.
He noted that the industry will still lose roughly 3 million tonnes of production per year, or 10%.
That would be a loss of over 19 billion ringgit ($4.35 billion) at Monday's benchmark crude palm oil prices.
"Because of the compounding problems with labor, first-half production is lower than first-half last year," he said.
According to Nageeb, harvesting intervals at some plantations have increased to much to 50 days, compared to a standard of 14 days previously.
(1 ringgit = 4.3670 ringgit)
