PETALING JAYA: The labour woes in the oil palm plantation sector in Malaysia have eased with many planters expecting normalcy by the middle of this year, says Malaysian Palm Oil Association (MPOA) chief executive Joseph Tek.
This is following the return of more foreign workers, he noted.
Based on the association’s survey on recruitment of foreign workers for 2022, Tek said about 21,000 foreign workers have returned to the estates of the MPOA members.
However, the shortage of workers with right skill to harvest remains the main challenge faced by the plantation industry, according to Tek.
“Typically, it will take a few months to train new workers to be skillful in plantation works, especially harvesting.
“The inherent skill set and culture of new workers may also not lead to desired productivity.
“It will take time and hopefully readiness will be there by peak production this year so that losses can be curbed,” he said in a statement after the MPOA Sabah branch AGM in Sandakan last Saturday.
MPOA represents about 70% of the privately-owned oil palm-planted areas in the country, which makes up about 40% of the total planted oil palm area.
Meanwhile, Tek expects the global palm oil industry to face tighter availability of crude palm oil (CPO) given a potential marginal increase by less than 3% in output from Malaysia and Indonesia.
“CPO production is expected to be impacted by the current heavy rainfall and floods in parts of Malaysia affecting oil palm estates.
“This will constrict palm oil production in the near future because of short-term disruptions to estate harvesting operation, logistics and poorer fruit-set,” he pointed out.
Tek added the last three years of La Nina had caused significant damage while the rising over-aged palm trees in Malaysia would constrain supply and replanting activities have been slow due to high costs.
Other significant events that would impact the industry include the potential weather shift from La Nina to El Nino, China’s consumer spending with the reopening of borders, ongoing Russia-Ukraine war, Indonesian policy on restrictions to export with its producers ramping up its B35 biodiesel mandate and the US dollar movement.
On CPO prices, Tek said: “Overall, prices should be able to find sustained support at current level encircling RM4,000 per tonne in the near-term.”
He cautioned players in the palm oil supply chain to closely monitor the latest developments in the sector and plan accordingly to mitigate potential risks and take advantage of any opportunities that may arise.
“By strategising and pursuing pragmatic replanting plans for long-term business sustainability along with investment and training in right-fitting mechanisation, especially for in-field collection is the industry’s ‘battle-call’ to mechanise or perish,” added Tek.
On Sabah, he said the state produced 23.3% of the country’s CPO, generating 4.29 million tonnes of CPO from its land bank of 1.51 million ha of planted oil palm area.
However, the crop yield declined by 2.4% year-on-year to 15.4 tonnes per ha per year while both oil and kernel extraction rates have dropped by 1.5% to 20.25% and 0.9% to 4.47% respectively.
“Sabah industry players look forward to discussing measures with the state government and its agencies to minimise opportunity losses in crop and revenue to the growers and the state due to the labour shortage.”
It is estimated that Sabah suffered over RM5bil losses in 2022 due to labour shortage.
In addition, Sabah should address its high old-age palm trees profile, which is the highest area of palm trees above 25 years old in Malaysia, he added.
