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Acute labour shortage causing Sarawak to lose billions

Friday, 13 May 2022

PETALING JAYA: The labour crunch has reduced the crude palm oil (CPO) production in Sarawak, with the state chalking up a loss of about RM2bil in revenue last year.

Sarawak Oil Palm Plantation Owners Association (Soppoa) chairman Eric Kiu said its members were short of 45,000 foreign workers in 2021.

“Using the 1:10 worker to area ratio, Sarawak needs about 160,000 workers to achieve optimal operation.

“Unfortunately, many plantations are running at 50% capacity now.

“Unlike Peninsular Malaysia, presently Sarawak plantation companies can only source workers from Indonesia,” said he in a statement yesterday.

The harvesting of palm fruit is still heavily dependent on workers and any shortage in harvesters will result in reduced CPO production, said Kiu.

“Sarawak produced about 3.9 million tonnes of CPO in 2021, which was 3.68% lower than the year before.

“This translated to a loss of about RM2bil in revenue for last year,” said Kiu.

He said there have been almost no new foreign workers entering the country for the last two years as the international borders were closed.“As a result, the oil palm plantations are unable to replenish vacancies left by those workers who had returned to their home countries prior to the pandemic, he said.

Malaysia has no other alternative but to recruit foreign workers because there is no automated equipment to replace manual harvesting for now, he said.

Plantation companies were unable to rely on locals to work on their plantations due to a lack of interest, a negative perception and a lack of the necessary skill sets.

Previously, Soppoa said that Malaysian CPO prices had hit RM5,000 a tonne in October 2021 and another record high at RM6,000 on Feb 17, 2022.

However, local palm oil companies could not enjoy the full benefit, as 20% to 30% of palm fruits were left unharvested and rotten due to insufficient harvesters.

Losses incurred by companies translate to a loss of opportunity to generate more revenue for the government through the collection of corporate tax, said Kiu.

“Soppoa and other business communities have continually asked the government to negotiate harder with countries like Indonesia and Bangladesh or others for supply of workers.

“It can only be done via government-to-government,” said Kiu.