MPOA: Entry of foreign workers to plantations expected to generate revenue of RM4 billion

LUMPUR: Malaysia’s palm oil industry is set to generate RM4 billion in revenue – if half of the indicated 40,000 foreign workers needed by the sector were allocated harvesting duties, said the Malaysian Palm Oil Association (MPOA).

In a statement yesterday, the association expressed its gratitude to the Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani, who shared the pivotal decision emerged from a meeting between Home Minister Datuk Seri Saifuddin Nasution Ismail and Human Resources Minister Steven Sim on Jan 16 this year.

The freeze on foreign worker recruitment, in place since March 17, 2023, had posed challenges to various industries, particularly the plantation sector, MPOA said.

Therefore, it appreciated the government’s prompt response to address the critical labour deficit, acknowledging the estimated revenue losses of RM20 billion in 2022 due to the shortage of oil palm harvesters.

This deficit persisted into 2023, resulting in negligible improvement in fresh fruit bunch (FFB) or crude palm oil (CPO) production year-on-year post-Covid-19.

“The admission of 40,000 workers into the plantation sector holds significant economic potential. Assuming half of them are allocated to harvesting duties, constituting a workforce of 20,000 dedicated harvesters, there is an opportunity for substantial economic impact.

“Considering the efficiency of each harvester cutting one tonne of FFB per day over 260 working days per year, and with the current FFB price at RM750 per metric tonne, the potential recovered FFB amounts to a substantial 5.2 million tonnes, translating into a staggering revenue of close to RM4 billion,” MPOA said.

It noted that these figures demonstrate not only the economic prosperity generated within the sector, but also its cascading impact on government revenue.

“This aligns seamlessly with the concept of Madani, emphasising our shared destiny and the collective benefits derived from concerted efforts in driving economic growth and sustainability.”

MPOA also stressed that its members were guided by the Responsible Recruitment Guideline. launched in 2023. to ensure conducive accommodation and welfare for foreign workers during the recruitment process.

“This guideline is a key component of the MPOA Responsible Employment Charter released in 2022, emphasising ethical recruitment practices and the well-being of the workforce.”