MALAYSIA’S palm oil sector could generate additional output and revenue of up to RM4 billion (S$1.1 billion) this year, following a government move that would allow plantations to hire foreign workers, an industry group said on Wednesday (Jan 24).

The government has imposed a hiring freeze on migrant workers since last year pending a review into recruitment practices, but said this week it would allow some to be brought in to address a shortage of about 40,000 labourers in the agriculture sector.

Palm oil output could rise by an additional 5.2 million tonnes in fresh fruit bunches this year, if half of the 40,000 workers were allocated to harvesting duties, Malaysian Palm Oil Association (MPOA) chief executive Joseph Tek said in a statement.

“The decision comes as a significant relief for Malaysia’s oil palm industry,” Tek said.

Almost 80 per cent of Malaysia’s plantation workers are migrants, mostly from neighbouring Indonesia, but a prolonged labour crunch has led to estimated revenue losses of about RM20 billion in 2022.

The shortage has continued to weigh on output, with crude palm oil production rising marginally by 0.5 per cent to 18.55 million tonnes last year, Tek said.

A NEWSLETTER FOR YOU

Friday, 8.30 am

Asean Business

Business insights centering on South-east Asia's fast-growing economies.

Sign Up

Malaysia’s palm oil industry regulator said this month it expects output to come in at about 18.75 million tonnes in 2024. REUTERS