MPOA: No growth in CPO output for the third year


PETALING JAYA: The oil palm plantation sector is experiencing its worst ever availability of workers since the commercialisation of palm oil in 1917, according to the Malaysian Palm Oil Association (MPOA).

In a statement yesterday, the association said the country would likely end the year with lower total crude palm oil (CPO) production.The total CPO production for this year is estimated at 18 million tonnes.

“If so, it will be three years in a row with no growth in CPO production in Malaysia contrary to earlier forecasts of higher CPO production figures for 2022.

“Hence, the industry’s opportunity losses could reach more than RM20bil by year-end,” said MPOA.

There are also significant crop losses, ranging from 15% to 25% – or higher, that continue to plague the plantation sector, it added.

“This scenario is set against the backdrop of the snail pace return of foreign workers even as the oil palm trees are now at its peak cropping time of the year.

“The plantation industry is no longer at the breaking point, it has been pushed beyond its breaking point,” MPOA pointed out.

MPOA represents about 70% of the privately-owned oil palm-planted areas, which makes up about 40% of the total planted palm oil area in Malaysia.

Its members include major plantation companies such as Sime Darby Plantation Bhd, FGV Holdings Bhd, Kuala Lumpur Kepong Bhd and IOI Corp Bhd.

In addition, there are uncertainties relating to the potential damaging effects form the year-end’s monsoon including the forecast triple-dip La Nina.

“There are also other potential lagged effects on production following earlier and present non-completion or cut-downs in fertiliser applications among growers. The down-side factors will manifest to further weigh down on CPO production,” it said.

The slow return and entry of foreign workers to the plantation operations will become the critical factor.

According to MPOA, the plantation industry continues to reel from the shortage of workers, which has now mothballed to about 120,000 workers.

It was reported that a total of 47,000 foreign workers for all business sectors had entered the country, set against approvals for 385,000 since January.

“This translates to a 12% success rate in terms of entry against approvals,” it added.

From the business perspective, MPOA said the prolonged labour crunch amid the low supply of the foreign workers would continue to affect yield recovery with significant losses incurred in the oil palm estates.

On the other hand, there is a significant hike in the cost of production especially with the high prices of fertiliser inputs, logistics and the substantial 25% to 36% hike in the minimum wages.

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