Target of 20m tonnes CPO production in limbo

The industry dragged by the nationwide acute shortage of manual harvesters


MALAYSIA may not be able to achieve the 20 million tonnes crude palm oil (CPO) target this year if the 75,000 foreign workers shortage is not addressed, the Malaysian Palm Oil Council (MPOC) said.

The industry may not generate an extra RM20 billion revenue this year, dragged by the nationwide acute shortage of manual harvesters.

MPOC Science, Environment and Sustainability Division director Dr Ruslan Abdullah stressed that the oil palm will continue to produce crops, with or without workers.

“Whether it is harvested or not, new crops will come in. If you do not harvest the crop, we will just lose money, so all the efforts to get a good healthy crop by fertilising, taking care of them are wasted because we are not going to get any product.

“With the change of government, policy might change, we don’t know what is going to happen but as far as the industry is concerned, we are in dire need of foreign workers so we can keep up with productivity,” he told reporters after the “Environmental, Social, and Corporate Governance (ESG) and Palm Oil Industry: Between Myth and Reality” webinar organised by MIDF Research yesterday.

According to the Malaysian Palm Oil Association, the government may lose up to RM2 billion in additional tax collection from the palm oil sector due to the expected loss in production revenue of between 20% and 30% in 2021.

Ruslan said the palm oil industry is very labour dependent, especially in terms of harvesting. To date, the local industry does not have the machinery to assist palm oil producers in terms of harvesting as it is still done manually.

“The plantations need harvesters as it requires some skills to harvest the upright fruit. Without proper harvesting skills, there will be losses.”

Ruslan said there has been a freeze on the intake of foreign workers since the first Movement Control Order was imposed on March 18 last year. During the period, foreign workers who had returned to their home country were not allowed to re-enter Malaysia.

He said some initiatives have been taken by companies, together with the government, to ease the labour shortage and to allow the entry of foreign workers.

“The Federal Land Development Authority (Felda), for example, has been quite active in terms of discussing what needs to be done to allow the foreign workers to come in, given the current situation.

“Felda has offered to go to Indonesia to set up a vaccination centre for potential workers, so that they can be brought in to work as harvesters in Malaysia,” he said, adding that the workers will undergo the normal standard operating procedures imposed by the Ministry of Health.

He hopes all the initiatives taken by companies like Felda and also Sime Darby Plantation Bhd will materialise in the near future.

Moving forward, he said it is important for industry players to remain competitive and to continue to be a responsible contributor to food security.

“To be a responsible producer that respects sustainability, importance of biodiversity conservation and environment,” he added.