PETALING JAYA: Malaysia will miss out on the golden opportunity to expand its palm oil market if it does not resolve the labour shortage in the country, says an analyst.
Singapore-based Sathia Varqa of Palm Oil Analytics said Indonesia’s ban on exports of crude palm oil (CPO) and refined, bleached and deodorised (RBD) palm oil gave Malaysia the perfect opportunity to expand its export market, particularly to China, India, Pakistan and Bangladesh.
Malaysia is the world’s second-largest exporter of palm oil after Indonesia, whose export ban has left markets in shock and prices skyrocketing. As of April 27, palm oil prices hit RM7,520 per tonne.
However, Sathia said Malaysian plantations, with some 80% relying on foreign workers, were now facing a labour shortage.
The situation, which he described as “very bad”, had affected production. “This means there is limited CPO for exports and processing,” he told FMT.
Sathia said “all eyes” were now on the government to make good on its promise to recruit 32,000 workers.
“The question is when will we see boots on the ground,” he asked.
It was previously reported that the government was preparing to bring in 32,000 workers to bolster the palm oil sector, with plantation industries and commodities minister Zuraida Kamarudin saying Putrajaya was preparing special procedures to speed up the process.
Sathia said if Malaysia did not resolve the labour shortage, it would lead to losses in terms of crops and export dollars.
He said he hoped the government would speed up the process of bringing more workers into the country and into palm oil plantations.
He also said that the weakening of the ringgit, coupled with discounts on palm oil and the ban on palm oil exports from Indonesia, offered an excellent window of opportunity to ramp up exports in May.