Malaysia Palm Growers to Lose $4.6 Billion on Labor Shortage




  • In Business
  • 2022-12-06 09:12:50Z
  • By Bloomberg

(Bloomberg) -- A chronic shortage of plantation workers in Malaysia may cost palm oil producers about 20 billion ringgit ($4.6 billion) this year, according to the Malaysian Palm Oil Association, curbing supply and potentially boosting global prices.

Most Read from Bloomberg

  • 'Huge, Missing and Growing:' $65 Trillion in Dollar Debt Sparks Concern

  • Stocks Hit by Fed-Hike Jitters as US Yields Surge: Markets Wrap

  • Russia Blames Ukraine for Blasts at Bases That Damaged Warplanes

  • Elon Musk's Impossible Electric Truck Is Getting the Last Laugh

  • Ambitious Plans to Build Indonesia a Brand New Capital City Are Falling Apart

Palm growers hired around 14,000 foreign workers this year through November, just a fifth of the industry's needs and about half of the number approved by the authorities, according to a survey of top 10 planters by the association. The country is the biggest producer of the tropical oil after Indonesia.

Malaysia's palm oil sector is reliant on overseas labor, and has struggled to bring in more workers as movement curbs due to the virus were relaxed. The government assured the industry it would accelerate worker approval, but planters say progress is too slow and is leading to crop losses. Without enough boots on the ground, many farmers had to leave ripened fruit rotting on trees.

The number of foreign workers coming in is "trifling" compared with the amount needed, said Joseph Tek, chief executive of the association that represents 40% of the country's planted palm area. While there have been efforts by various agencies to facilitate worker arrivals, bottlenecks still persist, he said.

Malaysian output of palm oil, used in everything from food and cosmetics to biofuels, is forecast to drop for a third year, to 18 million tons in 2022, the association said in September.

Concerns over weaker production may support prices of the oil. Palm oil jumped earlier in the year due to Russia's invasion of Ukraine but then declined as the supply situation improved and Indonesia ramped up exports. They've turned upward again, however, rising about 20% since late September.

The palm oil sector is seeking help from Malaysia's new government to expedite the process of bringing in more plantation workers, Tek said. Authorities are taking steps like chartering planes and renewing agreements with governments in source countries to bring in more workers, he said.

(Updates with chart)

Most Read from Bloomberg Businessweek

  • The Club With a 60,000-Woman Waitlist

  • How to Cash Out of a Small Business Without Selling Out

  • 11 Hours With Sam Bankman-Fried: Inside the Bahamian Penthouse After FTX's Fall

  • TikTok's Viral Challenges Keep Luring Young Kids to Their Deaths

  • Can Duolingo Actually Teach You Spanish?

©2022 Bloomberg L.P.

COMMENTS

More Related News

Adani Flagship Shelves $122 Million Bond Plan After Market Rout
Adani Flagship Shelves $122 Million Bond Plan After Market Rout

(Bloomberg) -- Adani Enterprises Ltd. has shelved a plan to raise as much as 10 billion rupees ($122 million) via its first-ever public sale of bonds...

UK Stocks Just Hit a Record. That Might Be as Good as It Gets
UK Stocks Just Hit a Record. That Might Be as Good as It Gets

(Bloomberg) -- Most Read from BloombergWhat You Need to Know About the Suspected Chinese Spy Balloon Floating Over the USTrump Offers $1 Million Bond to...

Inside the 19-Hour Meltdown That Junked Adani
Inside the 19-Hour Meltdown That Junked Adani's Share Sale

(Bloomberg) -- A beaming Gautam Adani stood beside Israeli Prime Minister Benjamin Netanyahu on Tuesday, looking relaxed as hundreds of people gathered for...

This Week in China: The World
This Week in China: The World's Best Stocks Need New Buyers

(Bloomberg) -- China's all-or-nothing stock market is losing momentum, after three months of what might be best described as forced buying of a deeply...

'Teflon' Elon Wins Again as Jury Rejects Fraud Claim Over Tweets

(Bloomberg) -- Elon Musk proved once again that he's difficult to beat in court.Most Read from BloombergWhat You Need to Know About the Suspected Chinese Spy...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business