Malaysian palm oil groups urge Sabah state to allow work to resume

[KUALA LUMPUR] Two Malaysia palm oil grower groups on Tuesday asked the government of Sabah, the country's biggest palm producing state, to reconsider the extension of an order suspending palm operations as part of coronavirus containment efforts.

Sabah, in East Malaysia, produces about 25 per cent of the country's palm oil. On Monday, it expanded the shutdown of palm oil plantations and factories to six districts in the state from three and extended the order until April 14, from March 31, after several palm estate workers tested positive for the virus.

The Malaysia Palm Oil Association and Malaysian Estate Owners' Association urged the state government in a statement on Tuesday to allow critical operations including harvesting, crop evacuation and milling during the shutdown order.

The associations said the order will disrupt 75 per cent of the state's palm oil production and affect about 65 per cent of the 1.2 million hectares (2.96 million acres) of plantations in the state.

It would lead to a potential revenue loss of 860 million ringgit (US$199.86 million) a month for the state, they added.

The planter groups said palm growing companies risk losing their estate and mill workers, totalling about 100,000 people, as some cannot afford to pay salaries during the closure.

The industry will face a big challenge resuming operations without the required workforce, they said.

The extended suspension comes as Malaysia, the world's second-biggest palm oil producer, tightened its one-month restricted movement order to stem the coronavirus spread.

Malaysia has recorded 2,626 cases of the virus, the highest in South-east Asia.

REUTERS