KUALA LUMPUR - Malaysia's palm oil producers are embarking on a rare recruitment drive to hire locals and accelerating industry mechanisation as they grapple with a severe shortage of foreign labour due to the coronavirus pandemic.
The Malaysian Palm Oil Association believes this could blow out to 70,000 workers once borders reopen. Malaysia's average cost of production is already slightly higher at about US$406-$480 a tonne, according to analysts, compared with Indonesia at US$400-US$450 a tonne. "It's possible that recruiting more locals could bring down the cost of production, but provided these locals are also as productive as them ," said MPOA chief executive Nageeb Wahab."That is a big question mark."
"It is bad, but I need to do this to survive," said an official of a mid-sized estate in Sarawak who declined to be named.The labour shortfall is adding urgency to long-standing plans for industry mechanisation. IOI said it has a"revitalised mechanisation plan", and aims to mechanise fertilising and pesticide spraying as well as automating mill operations, while FGV Holdings plans to mechanise an extra 30,000 hectares over the next three years.