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PETALING JAYA: Plantation companies with large oil palm farms in Sabah are back on high alert mode following the stricter closure of the Enhanced Movement Control Order (EMCO) in Lahad Datu, Tawau, Kunak and Semporna, they say industry players.
The escalation of Covid-19 cases in the four affected districts had led to the closure of non-essential businesses for 14 days starting on September 29. Initially, the Kunak authorities had stated that the oil palm plantations and mills could not operate during the closure. period.
But after a series of appeals by local planters and the Malaysian Palm Oil Association (MPOA), the closure was lifted and the Kunak farms and mills were back online as of yesterday (September 30). Despite the “one-day” closure for planters and millers in Kunak, there are still fears that the Covid-19 pandemic outbreak will continue to persist in Sabah.
Malaysian Property Owners Association (MEOA) President Peter Benjamin (photo) told StarBiz that “if the closure repeats and the farms are unable to operate, it will have a huge impact on plantation companies, particularly in crop losses.
“And after the lockdown is lifted, there will also be a high cleanup cost (the neglected properties).” Therefore, authorities should allow planters to operate “at a reduced capacity to restrict the movement of workers on their farms and mills.” In March, Tawau and Lahad Datu became the first victims of a Covid-19 lockdown within the plantation sector in the country.
A temporary suspension was imposed on the oil palm farms there for seven days starting on March 25, while the palm oil plants were closed for five days starting on March 27.
At the time, both MPOA and MEOA had warned that Sabah would likely suffer a loss of income of around RM860,000 if oil palm plantations and mills in the state were closed for a month. This will also result in a loss of approximately 7.5% or RM57 thousand in sales tax revenue for the government, which could be used to support the fight to contain the coronavirus outbreak. Sabah has around 1.54 million hectares of the total area planted for oil palm in Malaysia at the end of December last year.
According to analysts, plantation companies with a huge land bank in Sabah include IOI Corp Bhd
(59%), (IJM Plantations Bhd (41%), FGV Holdings Bhd (31%), Genting Plantations Bhd (29%), Kuala Lumpur Kepong Bhd (16%) and TSH Resources Bhd (fifteen%).
One analyst said that currently, there will be no significant impact on planters with operations in the four affected districts in Sabah as “they are now allowed to operate at approximately 50% of their capacity or more, depending on the decision of the respective authorities. from District”.
MPOA CEO Datuk Nageeb Wahab noted that the productivity situation is still good, as the latest lockdown only lasted one day in Kunak.
However, he cautioned that the future risk for planters in Sabah is if the local authorities decide to reinstall the MCO again, especially during the current peak production season.
This will definitely disrupt critical palm oil harvesting, crop evacuation and milling operations, which will affect the results of the planters, Nageeb added.
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