by AZALEA AZUAR & AUFA MARDHIAH / pic by TMR
THE PLANTATION sector may incur up to RM7.5 billion losses if it fails to meet its projected annual production of 20 million tonnes this year due to workers shortage.
Palm oil expert and founder of the Roundtable on Sustainable Palm Oil (RSPO) MR Chandran said if Malaysia is unable to recruit foreign workers soon, the palm oil industry will suffer a loss of at least 1.5 million tonnes of CPO.
As a result, companies, smallholders and growers will not be able to harvest 100% of the crops from the peak period from next month onwards.
“In other words, our estimated production this year will only be around 18.5 mil tonnes whereas it should be at 20 mil tonnes plus. At an average CPO price of RM5000/mt, this translates to a huge revenue loss of RM7.5 billion,” Chandran told The Malaysian Reserve (TMR) in a recent interview.
He said that Malaysia has suffered from the loss of crops in the past two to three years.
“We are already at a 20- to 30-day interval in some of these plantations, especially in Sabah due to the huge shortage of workers,” he added.
When the harvesting interval increases from 12 to 25 days, Chandran said, the quality will begin to deteriorate which will affect the quality of the crude palm oil (CPO).
As a result, many companies will have to sell their CPOs at a discounted price.
Currently, he said the real issue is that the palm oil industry has specialised workers, especially those who can harvest older palm oils.
“Because this is a highly-skilled, physically demanding test and here we have been relying heavily on Indonesian workers,” he explained.
“Now, if you give a choice to our Malaysians to work in any of these sectors, they would prefer to go and work in manufacturing. Because to them, those conditions are much better to work in a factory – an air-conditioned factory is much less physically demanding than an agricultural field.”
Last week, Indonesia announced that it has temporarily stopped sending its citizens to work in Malaysia, including those in the plantation sector, due to a breach in a worker recruitment deal signed between the two countries.
It has been reported that Malaysia, the number two palm oil producer in the world, is facing a 1.2 million labour shortage.
120,000 workers are needed for the plantation sector while 627,000 are required for manufacturing and 550,000 for the construction sector.
“What the ministry should be doing is we should get the relevant stakeholders who are involved in this, that is the companies who require the workers to their appropriate agents, trade bodies like the Malaysian Palm Oil Association (MPOA), the Malaysian Estate Owners Association (MEOA) and the Sarawak Oil Palm Plantation Owners Association (SOPPOA).
“They need to have a meeting with the relevant ministries such as the Home Ministry, the Human Resource Ministry and whoever is responsible to work out a very transparent recruitment policy,” Chandra stressed.
Malaysian Employers Federation President, Syed Hussain Syed Husman also believes that the plantation sector will be the worst-affected by the freeze order as it is more reliant on Indonesian workers for harvesting activities.
However, Director General of Malaysian Palm Oil Berhad (MPOB) Datuk Dr Ahmad Parveez Ghulam Kadir said that as the regulator of the industry, MPOB is preparing for the peak season.
“In MPOB we actually have few initiatives to cater to the shortage of workers – we have the Kursus Operasi Mekanisma Ladang (KOML) which is a skills-based training in plantation machinery for the oil palm plantation sector. The program is also fully funded by the government under MPOB. With this program, we hope that our local youth are more intrigued to join the plantation sector – thus reducing the sector’s dependence on foreign workers,” he said.
“Other than that, we also encourage mechanisation via government collaboration for smooth operation in the plantation sector. With mechanisation, we can double our palm yields – the use of human resources is quite limited due to age, physical endurance and working hours, but with machines all this will have no effect.
In addition, he said MPOB also encourages industry players to invest part of the profit to go into mechanisation – although this may take some time but this is very necessary. Palm oil is one of the economic resources that contribute to the country’s gross domestic product (GDP), hence it is time for us to develop a more advanced machine for our plantation sector,” he said to The Malaysian Reserve.
It was also reported that the Human Resource Ministry has started the process of recruiting foreign workers from Bangladesh involving over 2,000 workers in 15 companies. The previous issue on hiring Bangladesh workers has been resolved with the Bangladesh High Commission in Kuala Lumpur.
However, entry of the workers are subjected to safety and health screening including compliance with the Malaysian Immigration Department compliance.
RELATED ARTICLES
Singapore contributes US$60,000 for disaster relief efforts in Malaysia and the Philippines