Commodities News

Malaysia Reconsiders Foreign Labor for Palm Industry


Malaysia’s palm oil producers are starting atypical recruitment program to employ locals and industry that is accelerating as they grapple with a severe shortage of worldwide labour because of the coronavirus pandemic. As the September-November top season that is manufacturing, companies are erecting banners near plantations and publishing work that is online boasting free housing, free water and other perks of estate life in a bid to lure employees doing every thing from driving tractors to harvesting.

Already, travel and movement restrictions have left the planet’s second-largest palm oil producer grappling by having a shortage of 37,000 employees, nearly 10% for the workforce that is total. The Malaysian Palm Oil Association (MPOA) believes this might blow out to 70,000 workers once borders reopen.

” This might be enough time that is first are making this type of big effort to employ Malaysians, but it is also the very very first time we are facing COVID-19,” Imran, an estate manager with Sime Darby Plantation, told Reuters after interviewing potential applicants at a recruitment day near Kuala Lumpur.

The industry fears the labour crunch will harm palm oil manufacturing this season by delaying the harvest of perishable good fresh fruit, giving an advantage to bigger rival Indonesia which has no labour that is such.

Malaysia’s typical cost of production is currently significantly higher at about $406-$480 a tonne, in accordance with analysts, compared with Indonesia at $400-$450 a tonne.

Nations like Indonesia and Bangladesh offer nearly 85% of plantation employees for palm companies such as Sime Darby, IOI Corp and United Plantations.

While employing more Malaysians could conserve on recruitment fees and levies needed to fly in foreign workers, planters worry that local workers, who typically shun plantation work as dirty and dangerous, will maybe not agree to the industry and take on most jobs that are difficult.

“It’s possible that recruiting more locals could bring the fee down of production, but provided these locals are also as productive as them (migrant workers),” said MPOA chief executive Nageeb Wahab. ” that is clearly a big concern mark.”

Despite unemployment that is rising, Imran said most of the interest at the recruitment day was for general duties, such as motorist or mechanic, rather than the taxing and task that is crucial of.

With more workers that are foreign, some severely understaffed smaller businesses, which are less able to retain labour that is migrant have resorted to poaching workers from rivals.

“It is bad, but i must repeat this to survive,” said the state of a estate that is mid-sized Sarawak who declined become known as.


The labour shortfall is urgency that is adding long-standing plans for industry mechanisation.

Sime, the earth’s palm oil company that is biggest by land size, told Reuters it is quickening development and trials to deploy “light machines” that will aid in industry upkeep, removing harvested crops and applying fertiliser.

Its also switching to remote sensing and cleverness that is artificial drive “precision farming”, making the most efficient utilization of farm inputs and field workers.

IOI said it includes a mechanisation that is”revitalised, and aims to mechanise fertilising and pesticide spraying along with automating mill operations, while FGV Holdings plans to mechanise an additional 30,000 hectares within the next 36 months.

Malaysia on average allots one worker for every single 8 hectares, but a”quantum is wanted by the MPOA leap” in technology that will double the land area for each worker to 16 hectares. This would reduce reliance on labour, which accounts for around 30% of manufacturing costs.

“Imagine inventing a drone that can travel under the canopy of palm woods, with a scanner to identify fruit that is ripe and a laser attached to slice the bunch,” stated M.R. Chandran, a veteran industry official turned consultant.

“By totally modernising plantations with drones, artificial intelligence and robotics, we can also make plantation work more desirable for locals.” And so Malaysia’s palm oil producers are starting atypical recruitment program.


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