Private palm oil companies in Sarawak not ready for minimum wage hike from May 1, says Soppoa

Tuesday, 26 April 2022

KUCHING (April 17): Only two government-linked companies (GLCs) in the palm oil industry have agreed with the RM1,500 minimum wage hike starting May 1, while the other private companies are not ready, said Dr Felix Moh.

The Sarawak Oil Palm Plantation Owners Association (Soppoa) chief executive officer said the GLCs, having backing from the government, are presumably more resistant to the economic shock as a result of the sudden rise of minimum wage by 36 per cent.

“Therefore, it makes good business sense for the GLCs to undertake a feasibility study to gather more convincing data on the RM1,500 minimum wage for a period of time before it is gradually implemented on private sectors,” he said in a press statement today.

Moh reaffirmed that Soppoa members cannot afford to increase wage at the moment.

“Despite the high palm oil price, input cost like fertilisers and chemicals have increased by 100 per cent compared to last year.

“On top of that, all plantation operations are running at less than 50 per cent capacity as there is no improvement on labour intake.”

Moh said: “In a worst case scenario, at present high cost of production, oil palm plantation in Sarawak may struggle to maintain positive balance sheet if there is a drastic drop of palm oil price to below RM4,000 per tonne.”

He said while the palm oil industry appreciated the effort contributed by the Human Resources Minister Datuk Seri M Saravanan in helping the business sectors in solving labour crunch, the views of the private sectors collectively should be heeded.