Labour shortages in Malaysian oil palm plantations costing up to US$5.07bn/year
09/03/2026 (Oils & Fats International) - Labour shortages in Malaysian oil palm plantations are causing losses of approximately MYR7.5bn-MYR20bn (US$1.09bn-US$5.07bn)/year, according to a 1 March report by The Star quoting Malaysian Employers Federation (MEF) president Dr Syed Hussain Syed Husman.
Husman said the situation highlighted how heavily the plantation sector relied on foreign workers, who make up about 80% of the workforce, particularly oil palm harvesters.
Travel restrictions and slow recruitment processes had resulted in significant volumes of fresh fruit bunches (FFBs) remaining unharvested, leading to reduced oil extraction rates and deteriorating crop quality, he added.
“When harvesting is delayed, the losses are not just immediate but compounded. The quality drops, output declines and the overall efficiency of operations is affected,” Husman said.
Labour shortages were also impacting production output in other critical sectors, the 1 March report said.
“As of this year, about 77% of manufacturers highlighted that labour shortages are their primary operational challenge, even surpassing concerns over tariffs and trade barriers,” Husman said.
Labour shortages could also push up wages, overtime and recruitment costs, forcing employers to either absorb the extra costs or pass them on to consumers, he added.
Husman noted that uncertainty over workforce availability could also affect plans for businesses’ growth or new projects, which could slow economic activity, disrupt job creation and affect the country’s appeal to both domestic and foreign investors.