No growth in CPO production for third year amid slow return of workers, says MPOA
08/09/2022 (The Edge Markets), Kuala Lumpur - The Malaysian Palm Oil Association (MPOA) said the domestic oil palm plantation sector is experiencing its worst-ever availability of workers on the ground since the commercialisation of oil palm back in 1917.
In a statement on Wednesday (Sept 7), the MPOA said Malaysia may likely end this year with lower total crude palm oil (CPO) production.
It said total CPO production for 2022 is now estimated to be at 18 million tonnes.
If so, it said this will be three years in a row with no growth in CPO production in Malaysia, contrary to earlier forecasts of higher CPO production figures for 2022.
The MPOA said the industry’s opportunity losses could reach more than RM20 billion by year end.
It said there are significant crop losses, ranging from 15% to 25%, or higher, which have continued to plague the plantation sector.
The MPOA said oil palm growers revealed that their harvesting rounds have gone way past from the best practice of an interval of 10 to 15 days.
It said while many growers are already struggling at an interval of 30 to 45 days, there are also reports of growers already hitting an interval of 60 to 90 days.
This implies that there are field blocks of oil palm trees where the crops have not been harvested for over two months since their last harvest, said the MPOA.
Outlook
The MPOA said total CPO production in 2020 was 19.1 million tonnes, and 18.1 million tonnes in 2021.
It said this rendered to a significant year-on-year decline of one milion tonnes amid the shortage of workers from 2020 to 2021.
The production forecast at the beginning of 2022 was for a crop recovery to 18.8 million to 19 million tonnes, but this has recently been revised downwards to 18.5 million tonnes by the Malaysian Palm Oil Board, and 18.6 million tonnes by the Malaysian Palm Oil Council.
The MPOA said the latest CPO production figures incorporating its survey revealed that CPO production in August is estimated at 1.7 million tonnes.
It said that cumulatively, as of August 2022, production stood at 11.54 million tonnes, versus 11.6 million tonnes in January to August 2021.
This means there was no growth in CPO production for the eight-month period.
Foreign workers
The MPOA said the plantation industry continues to reel from the shortage of workers on the ground, which has now moth-balled to around 120,000 workers.
It was reported that a total of 47,000 foreign workers for all business sectors have entered the country so far, set against approvals for 385,000 since January 2022, it said.
The MPOA said this translates into a 12% year-to-date success rate for entry against approvals.
It said the plantation sector generally prefers Indonesian workers vis-à-vis other source countries, such as India and Bangladesh.
Generally, it said Indonesian harvesters are better adapted physically, and known to be more efficient in harvesting fresh fruit bunches from oil palm trees.
As of Aug 15, the MPOA said, it was reported that there were only around 8,500 workers from Indonesia covering the needs of all sectors.