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COVID-19 pandemic causes labour shortage for Malaysia's palm industry

KUALA LUMPUR (Reuters) - Travel restrictions to prevent the spread of COVID-19, the disease caused by the new coronavirus, are causing labour shortages at Malaysia’s palm plantations, officials said.

A worker unloads palm oil fruits from a lorry inside a palm oil factory in Salak Tinggi, outside Kuala Lumpur August 4, 2014. REUTERS/Samsul Said/Files

The world’s second-biggest palm oil producer relies on foreigners for 70% of its plantation workforce, drawing mainly from neighbouring Indonesia and from South Asian countries. Recruitment, however, has stalled in recent months because of stay-at-home orders in Malaysia and other countries to prevent the disease spread.

The Malaysian government said this week the country’s plantation industry, including palm, was short by 500,000 workers.

“We have not received new workers in the last three months,” Nageeb Wahab, chief executive of the Malaysian Palm Oil Association (MPOA), said last week. “Many workers have repatriated and absconded during the lockdown. A lot of estates will be short of workers.”

MPOA, which represents big planters such as Sime Darby Plantations and FGV Holdings, wants the government to extend work permits for existing workers and speed up recruitment from countries such as Bangladesh.

However, Plantations and Commodities Minister Mohd Khairuddin Aman Razali has urged the companies to hire more local workers.

“If we talk about the introduction of new foreign workers in the sector, it will not happen in the near future because we have restricted their entry until further notice,” Mohd Khairuddin told state-run Bernama TV on Wednesday.

“The current batch of foreign workers are those who have a work permit... when their permit ends, they will be sent back to their respective countries. This is an opportunity for us to replace them with locals.”

He estimated the plantations and commodities sector, which includes palm, cocoa and rubber, currently employs 220,000 locals and 265,397 registered foreign workers but requires 1 million workers.

Palm plantations account for 18% of Malaysia’s total agriculture area, and without sufficient labour, palm fruits could get spoiled.

“Previously employers did not have the motivation to employ locals and locals were also not interested in 3D jobs,” Mohd Khairuddin said, using a local term for jobs that dirty, dangerous and difficult.

“Now there is a need to employ locals.”

Reporting by Mei Mei Chu; Editing by Christian Schmollinger