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KUALA LUMPUR: The Malaysian Palm Oil Association (MPOA) said oil palm plantation owners are willing to absorb all government imposed Covid-19 quarantine charges to overcome the current labor shortage , which is causing a 25% loss in palm oil yield.
“We are willing to pay the quarantine charges and will comply with all standard operating procedures that the government will introduce.
“But please allow all the workers who returned from leave to come back here,” said its CEO, Mohd Nageeb Abdul Wahab, on TV3’s Money Matters talk show.
He said the association proposes three items on its 2021 Budget wish list to safeguard the well-being of the oil palm industry, the well-being of one million small farmers, and improve the country’s income from the agricultural sector.
It was previously reported that he said the industry was facing a shortage of 36,000 workers even before the Covid-19 pandemic hit the country.
Malaysia, the world’s second largest palm oil producer, relies on workers from countries like Indonesia and Bangladesh. They represent 84% of its workforce in plantations.
When the pandemic struck and borders began to close, thousands of foreign workers left palm oil plantations to return to their respective countries. The MPOA said the sector had not been able to replace those who had left.
As for the second wish, the MPOA wants the government to unfreeze the hiring of foreign labor, saying the ban could lead to the demise of the industry.
“The industry requires more people, that is, for the harvesting operation. With the current CPO price trading at almost RM3,000 per ton, if we are not employing workers, what are we going to do?
The third wish, he said, is for the government to grant double tax relief to all who implement mechanization in industry.
When asked about the average CPO price for the remainder of 2020, Nageeb said the product would trade between RM2,500 and RM2,600 per tonne compared to RM2,000 per tonne last year.
“The CPO price has been reasonably good this year. Compared to last year, the increase is quite significant. Moving on to the first half of next year, price gurus are even more optimistic for the CPO as they expect La Niña to occur, reducing crop production.
“So it’s not all doom and gloom for the palm oil industry,” he added.
MPOA has 122 members, including large local plantation companies such as IOI Corp, Kuala Lumpur Kepong Bhd, Sime Darby Plantation, and FGV Holdings Bhd.
The industry produces around 20 million tons of palm oil per year, which represents 28% of the world’s palm oil supply. The sector has consistently contributed around 5% to the country’s gross domestic product.
Industry is also the second largest employer after the government, and requires a workforce of around 750,000. In 2019, its revenue amounted to 65 billion ringgit.
