Malaysian Palm Oil Council Russia's Post

*Labour shortage may drag on - New Straits Times*

20-Dec-2021 11:10:19 AM
AYISY YUSOF KUALA LUMPUR

PALM oil giants and market observers expect further delays in the arrival of some 32,000 foreign workers next year due to the Covid-19 Omicron variant and tighter restrictions.

The palm oil industry is already experiencing an acute shortage of about 75,000 harvesters.

As a result, crude palm oil (CPO) production could fall by 20 to 30 per cent this year.

Agricultural experts believe increasing the intake of foreign workers will allow the sector to produce more than 20 million tonnes of CPO per year.

Malaysian Palm Oil Board director-general Dr Ahmad Parveez Ghulam Kadir said the intake of foreign workers may now take longer in the "new normal" as it will involve various ministries and agencies in Malaysia and the source country.

"Thus far, there is no clear indication of the severity of Omicron," he told the New Straits Times.

"Given the improving vaccination rates in the country, we hope the new variant will not be the cause of further delay in the arrival of foreign workers." Malaysian Palm Oil Association chief executive officer Datuk Mohamad Nageeb Wahab said the industry is waiting for the Indonesian government's approval for its citizens to work in Malaysian plantations.

Meanwhile, FGV Holdings Bhd is preparing for new migrant workers.

"We anticipate the first batch of foreign workers to arrive at the end of the first quarter of 2022," an FGV spokesman told the NST.

Up to October, FGV was operating at 70 per cent of its workforce requirement. It is short of about 10,500 workers.

"This includes 2,000 harvesters required to achieve the optimal yield," he said.

A Sime Darby Plantation Bhd (Sime Plantation) spokesman said the integrated global plantation company is closely monitoring the Omicron development.

"If the entry restriction is expanded to include workers from major source countries, such as Indonesia, India and Bangladesh, this could delay the government's plan to bring in 32,000 foreigners to work as harvesters." Up to September, Sime Plantation had more than 25,000 workers in its upstream operations in Malaysia, over 16,800 of whom were foreign workers.

"This is insufficient to ensure optimal productivity as our total requirement for workers in the upstream operations in Malaysia is more than 32,000." Sime Plantation said it is short of about 7,000 workers, or about 22 per cent of the total worker requirement for upstream operations.

"The government's plan to bring in 32,000 foreign workers will certainly help address the shortfall." Sime Plantation also intends to push for the recruitment of local workers.

"This is done through continuous efforts to mechanise, automate and digitalise our plantation operations." It hopes to transform the nature of work on its estates, making plantation work less laborious while increasing efficiency and productivity.

The company is also leveraging machinery and adopting technologies such as drones to reduce dependence on labour.

"As we progress further with our mechanisation initiatives, we expect to attract more highly skilled Malaysians." FGV also plans to increase the recruitment of locals and mechanisation initiatives.
By: via Malaysian Palm Oil Council Russia