A labour shortage in Malaysia is causing a potential 25% loss of palm oil yield and is expected to worsen in the coming months, Reuters reported the Malaysian Palm Oil Association (MPOA) as saying on 20 July.

The MPOA, which represents plantation firms, said the government’s decision to freeze the recruitment of new foreign workers until December could lead to the ‘demise’ of the industry.

“Pre-COVID, we were already short of 36,000 workers. This (shortage) has already resulted in us not realising our potential production by 10%-25%,” MPOA CEO Nageeb Wahab was quoted as saying in a conference.

Malaysia, the world’s second largest palm oil producer, relies on workers from countries such as Indonesia and Bangladesh as they accounted for 84% of its plantation workforce.

Thousands had already left palm estates to return home as borders closed, and the MPOA said it had not been able to replace those who had left.

A lack of workers could delay palm fruit harvesting and lead to a drop in oil output, the group said, especially ahead of the peak production season that starts around September.

Plantation companies were actively hiring locals in support of the government’s policy, Wahab said, but they were not interested in jobs they considered dirty, dangerous, difficult and demeaning.

“If this (local recruitment effort) fails, we will need the government to help us,” he added.

The ministry was in talks with industry groups to address the labour concerns, Deputy Plantation Industries and Commodities Minister Willie Mongin said.

“We will discuss and formulate a strategy to address labour shortage issue,” he was quoted as saying during the conference.