The deepening labour shortage in Malaysia’s palm oil plantations continues to intensify. At this time last year, the labour shortage involved approximately 36,000 workers. Today, the figure stands at around 70,000 workers. The Malaysian Palm Oil Association (MPOA), which compiled these statistics, regards this shortage as a deeply troubling one.
MPOA chief executive officer Datuk Nageeb Wahab said, “The acute shortage in the estates is now felt across the board, from big plantation companies to smallholders.”
The government granted the palm oil sector permission to operate as normal during the ongoing Movement Control Order (MCO). However, Nageeb noted that this permission did not alleviate some of the sector’s woes. He said, “(Planters) are not able to fully exploit the current high crude palm oil price trading above RM3,300 per ton, which is at a decade-high. This is because they cannot fully optimize production in the estates, given the severe lack of palm fruit harvesters who are mostly foreign workers.”
Nageeb also mentioned that the current freeze on foreign worker recruitment caused plantations across Malaysia to severely suffer. Plantations currently cannot recruit any new replacements for departed foreign workers. During the MCO of 2020, the government permitted foreign plantation workers to return to their respective countries of origin. Most of these workers hail from either Indonesia or Bangladesh.
Nageeb noted that the average estate’s estimated production loss stands at around 20%. Such losses directly stem from the ongoing labour shortage. Palm fruit harvesters represent the majority of the labour shortage. Last year’s shortage of 36,000 workers included 31,000 palm fruit harvesters. Although the MPOA did not mention the exact breakdown of this year’s shortage, the number of palm fruit harvesters represented will likely increase in a similar ratio.
In addition to the government’s granting of permission to depart, many foreign palm oil workers also refused to extend during and after last year’s MCO. As a result, the sector’s outflow of foreign workers continues to increase.
According to the Malaysian Agricultural Producers Association (Mapa), the shortage of workers could lead to a total productivity loss of more than RM16 billion over the course of the year. This figure could increase if the labour shortage intensifies.
As of now, planted palm oil area covers around six million hectares of land in Malaysia. Of this area, mature palm oil plants occupy approximately 5.2 million hectares; immature plants take up the remainder.
Due to the current labour shortage, many planters chose to extend harvesting rounds. Such rounds now occur at 20-day intervals instead of the usual 10-day or 12-day intervals. This means that 2.5 or three rounds of harvesting now take place every month.
Industry experts expect the industry to suffer a loss of around six million tons of crude palm oil this year. The industry will also likely lose around RM9 billion in revenue.
20th January 2021 16:39
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