KUALA LUMPUR: The Covid-19 (coronavirus) pandemic has left Malaysia’s palm oil industry without enough workers, a shortage that could cost farmers as much as 25% of their annual production -- a loss worth about US$2.8 billion.
Malaysia’s economy relies on palm oil, its most important agricultural commodity, but palm oil needs migrant workers from Indonesia, Bangladesh and India to do jobs locals won’t.
Though environmental activists have pushed to rein in the palm industry for years, the labor shortage there signals the disruption unfolding at companies and farms around the world that depend on migrant workers. More than 70% of the country’s plantation workers come from outside Malaysia’s borders, according to an estimate by Rabobank; the country produces about 26% of the world’s most common cooking oil.
”We are indeed caught between a rock and a hard place as the first priority is of course to strictly adhere to the governments directives to keep Malaysia safe and Covid-19-free,” Chief Executive Director Carl Bek-Nielsen said by email. That would mean the recruitment process to hire guest workers probably can’t resume for the rest of the year, which would"aggravate and exacerbate an already perilous situation for many plantation companies.
In better times, the farmers might have raised wages to attract more workers. Not now, with global economies in free-fall and commodities prices growing more volatile. Even with a shortage of labor and, potentially, supply, the tropical oil on course for its biggest annual drop since 2012. "It’s not as simple as stopping production to let prices go up,” said Nageeb."The moment you stop your production for two weeks, to bring it back to normal will take two months.”
Documented and undocumented Indonesian workers are the biggest contingent among Malaysia’s immigrant palm laborers. When the country imposed its nationwide lockdown, many workers on short-stay visas returned to Indonesia, said Zana Amir, program officer at Migrant Care, a Jakarta-headquartered group."They feared having no income in Malaysia, as the government conducted raids on illegal workers,” Zana said.
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