by NUR HANANI AZMAN / pic by BLOOMBERG

PLANTATION industry needs more than 32,000 foreign workers to boost palm oil production, say industry players.

The government has announced last year that these foreign workers will arrive in Malaysia in stages from the middle of October, but it would require more workers especially on labour-intensive work.

A retired planter, Peter Benjamin, opined that these 32,000 workers will provide temporary relief but the shortage of workers is currently more than double.

Benjamin, a former CEO of United Malacca Bhd, said the labour department or immigration should work out to bring more workers as the companies are actually prepared to meet whatever standard operating procedures (SOPs) and quarantine requirements to allow them to bring in foreign workers.

“All the while, palm oil companies have been incurring recruitment costs to bring foreign workers — agency fee, air ticket, visa fee, medical fee, work permit even before the pandemic.

“The outlook for 2022 is bright, the widening gap between the supply and demand has underpinned the skyrocketing price of palm oil this year. But the shortage of workers really needs to be addressed seriously,” he told The Malaysian Reserve (TMR).

The palm oil industry is expected to have a good year with production forecast to increase by 30% to 20 million tonnes in 2022, said Plantation Industries and Commodities Minister Datuk Zuraida Kamaruddin recently.

“Malaysian crude palm oil (CPO) production dropped by 1.1 million tonnes or 6.3% to 16.7 million tonnes compared to 17.8 million tonnes in 2020 due partly to a shortage of labour. The government has agreed to employ 32,000 foreign workers with strict compliance to the current SOPs,” she said.

The CPO has enjoyed an excellent year in 2021 which witnessed the price more than double over the past 18 months, especially from June to October, when an incredible 50% surge sent it to its all-time high at RM5,074 per tonne.

Tight supply is expected to sustain CPO prices at current elevated levels in the early part of this year. It is noted that the present heavier-than-usual rainfall in some of the palm oil regions and unresolved labour shortages at various plantations will continue to weigh on production.

In addition, the first quarter is historically a low-production season for palm oil. Based on these circumstances, CGS-CIMB Research Sdn Bhd has projected that spot CPO prices would range between RM4,500 and RM5,500 per tonne this month.

Meanwhile, an industry player who requested anonymity questioned where would these 32,000 foreign workers come from as Indonesia has not signed the memorandum of understanding allowing their workers to come into Malaysia.

“Possibly, the workers are from Bangladesh, India and Nepal but these regions generally do not supply workers for the palm oil industry.

There is approximately 5.8 million ha of palm oil plantations in Malaysia with a ratio of one worker to eight ha, which means the sector needs 725,000 workers.

“There have not been any intakes since March 2020 while the output has been continuous since the first Movement Control Order. The present shortage would be nearing the 90,000 to 100,000 level,” he told TMR.

He said there is no choice, hence, the companies have to push as many male labourers available (train or retrain) them to be harvesters.

He said the surrounding tasks such as application of fertiliser, collection of fresh fruit bunches and loading should be done by machines and systems have to be developed to cope with these changes along with the terrain.

“In Sabah, local female workers are given the opportunity to be trained as tractor or machine operators. It took us almost a year to persuade them with training and slowly dispelling all the negative perceptions.

“So far, we try to get as many as we can to fill our 48-60 horsepower tractors. We are still looking out and training more. As times go by, the household income is seen to be much bigger and more tend to try. One couple at the peak can go up to RM10,000-RM11,000, average around RM6,000-RM7,000,” he added.

However, he does not think those female workers in the industry will be able to grow fast.

“It may take more years for locals to embrace this, and that also depending on the shift in society and mentality,” he said.