Malaysia palm growers warn of bigger labour shortage due to virus curbs

KUALA LUMPUR (Reuters) - A long-running labour shortage in Malaysian palm plantations could get worse as many workers from neighbouring Indonesia have gone back home amid coronavirus curbs, an industry body said on Friday.

FILE PHOTO: A worker unloads palm oil fruit bunches from a lorry inside a palm oil mill in Bahau, Negeri Sembilan, Malaysia January 30, 2019. REUTERS/Lai Seng Sin

The world’s second-biggest producer and exporter of palm oil relies on foreigners for 70 percent of its plantation workforce. Labour shortages are a perennial issue in Malaysia, a relatively industrialised country of 32 million.

More than 34,000 of about 2 million Indonesian migrant workers in various sectors have returned home after Malaysia imposed a month-long travel restriction that also requires non-essential businesses to shut down until April 14, according to the Indonesian Foreign Ministry.

Its spokesman, Teuku Faizasyah, said it was uncertain whether the workers would return to Malaysia.

Malaysia’s federal government has allowed palm firms to work with reduced staffing during the stay-at-home period but its biggest palm producing state, Sabah, has shuttered most palm operations until mid-April after seven coronavirus cases were found in an estate there.

“We feel allowing operations to proceed will contain this exodus of workers,” the chief executive of the Malaysian Palm Oil Association (MPOA), Nageeb Wahab, told Reuters.

“All hell will break loose if there were a total shutdown of palm operations in the whole country... My biggest concern is when these workers leave the estates seeking jobs elsewhere.”

MPOA's members include top producers such as Sime Darby Plantation Bhd SIPL.KL, FGV Holdings and IOI Corp Bhd IOIB.KL.

A shortage of workers could delay harvests and curb production as extraction rates fall, hurting the country’s top commodity export industry.

While palm giants are dipping into their reserves to pay staff, the Malaysian Estate Owners Association said small and mid-sized plantations were struggling to do so.

Malaysia has 3,333 coronavirus cases, the highest in Southeast Asia, with 53 deaths.

Reporting by Mei Mei Chu and Agustinus Beo da Costa; Editing by Nick Macfie