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Malaysian planters need to address labour crunch issue swiftly

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Publish date: Tue, 13 Apr 2021, 04:56 PM

HAVING adequate workforce in the plantation sector is vital to sustain the viability of the Malaysian palm oil industry.

In fact, a recent study by Khazanah Research Institute (KRI) has shown that the labour shortage issue inherent in the plantation sector is posing more threat to the industry’s economic health compared to the price volatility of the crude palm oil (CPO).

In the study entitled “Implications of the Dominant Shift to Industrial Crops in Malaysia: System Dynamic Model of Industrial Crops”, KRI found that a labour reduction of 30% from the current level will see the vegetable oil’s production reduced by half.

A further reduction of palm oil output of up to 80% will lead to a collapse in the supply chain, according to KRI visiting senior fellow Prof Dr Datin Paduka Fatimah Mohamed Arshad who is also the lead author of the study.

To curb the labour shortage issue, the Government may allow both the plantations and the commodities industry to hire foreign workers once the COVID-19 outbreak among the migrant workers in the sector is brought under control.

“Based on our channel checks and updates from the companies, the Government is still in discussions with plantation companies to accept experienced foreign workers in the plantation sector after COVID-19 swab tests are carried,” revealed UOB Kay Hian Research analysts Leow Huey Chuen and Jacquelyn Yow.

“Additionally, the plantation-related associations have also urged the Government to address and resolve the shortage of workers in the plantation sector.”

To re-cap, foreign workers are allowed to work in Sarawak from March 1 under stringent standard operating procedures (SOPs). On top of that, Sime Darby Plantation Bhd has also brought back over 100 migrant workers from Bangladesh as part of its pilot scheme to overcome labour crunch.

On a related development, the research house also expects palm oil exports to come in stronger in the coming months on the back of economic recovery and with strong demand from India.

This is given as of March, India’s palm oil inventory level was still low at 270,000 tonnes (2020 monthly average: 711,000 tonnes).

“On top of that, we might expect better demand from China as some provinces are experiencing African Swine Flu outbreaks,” noted the research house. “This could lead to lower soybean crushing, and hence benefit palm oil.”

All-in, UOB Kay Hian Research maintained its crude palm oil (CPO) price assumptions of RM3,000/tonne and RM2,600/tonne for 2021 and 2022 respectively.

“We expect CPO prices to continue trading at a high range in 1H 2021 as a result of current stock levels and the tight supply in 1H 2021,” added the research house. – April 13, 2021

 

https://focusmalaysia.my/top/malaysian-planters-need-to-address-labour-crunch-issue-swiftly/

Discussions
Be the first to like this. Showing 8 of 8 comments

DickyMe

Why depend on foreign workers?
Why cannot hire locals?

Is it because they are KAFIRS?

2021-04-13 17:12

DickyMe

How did the Brits were able to retain their workers without much problem?

Provide basic amenities and a decent salary then locals will work.


Do not be racist and discriminate against other faiths.

2021-04-13 17:15

Pee Wee

Because foreign workers are damn cheap! And our business culture is to make fat profit and nothing else! That's why you see business owners driving around luxury cars but none of them dare to pay minimum salary!
But the thing is, foreign workers are not cheap, they are just as expensive if you really add up everything!
The thing is, blame ourselves! In western countries, they don't really rely on cheap labour except on sectors that really cannot find locals to do them! Example, Australia where fruit picking are given to malays from Malaysia! If you think this is an insult, they are very well paid! In a year, they can make 100k just picking fruits or cleaning offices! That's why you see over one million malays in Australia!

2021-04-13 17:18

Pee Wee

Back in the 80s, we rarely hear about migrant workers in Malaysia! Most of the foreign factories mostly employed malay ladies! And they were well paid back then!

2021-04-13 17:19

DickyMe

Yes. Many Malaysians had two jobs and they were hardworking.

Then came the bloody racist mamak and his group of robbers who opened the borders for illegals to flood both Peninsular and East Malaysia States. Illegal Indonesians came in waves and now they are the "NEW MALAYS".

2021-04-13 17:23

AlsvinChangan

there will be alot of challenges

The Big Brother will soon nake noise

Forced Labor
Climate Change
Robbing taking away Native lands = genocide

2021-04-13 17:29

stockraider

Put it this way lah!

The cost per foreign workers including wages, levy, accomodations, insurance cost more than Rm 2k per moth, higher than a degree holder salary mah...!!

But the local fellow refuse to do the work mah...!!

Based on national interest ,Thus must open up let the foreign come & do the work loh!!

This way win win mah!

2021-04-13 17:30

DickyMe

"But the local fellow refuse to do the work mah...!!"

Who is the local fellow? Your father, son or relatives?

As far as I know, no Chinaman works in plantation except to boss around.

2021-04-13 19:00

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