Malaysia labour crunch cost palm oil sector US$2b between Jan-May

MALAYSIA is losing around 57,880 tonnes of palm oil fruit each day due to an acute shortage of labour, the commodities ministry said on Tuesday (Jul 19), costing the world's second-biggest producer more than US$2 billion in the first 5 months of the year.

The South-east Asian nation has grappled with worsening labour shortages throughout the pandemic, and efforts to bring in migrant workers from Indonesia and Bangladesh have stalled amid negotiations over measures to protect workers.

"Although the country's borders have reopened, the entry of foreign workers into the palm oil sector has not fully recovered," Minister Zuraida Kamaruddin told parliament.

Migrant workers make up more than 75 per cent of the workforce in plantation estates and staff shortages have throttled palm oil production in Malaysia amid a global edible oil shortage.

During the January-May period, planters faced an average shortage of around 54,190 workers, with more than 50 per cent of this total, or nearly 29,000 workers, supposed to be doing the critical harvesting and collection tasks, Zuraida said.

Her estimates were lower than those of plantation industry groups, which in recent months said they were short of as many as 120,000 workers.

Zuraida said based on the ministry's calculations, an estimated 57,880 tonnes of palm fruit went unharvested per day, or 1.5 million tonnes per month.

As a result, Malaysia had lost 7.52 million tonnes of palm oil fruit from January to May, valued at 10.46 billion ringgit. REUTERS