Palm oil: Trade disruptions, labour shortage, fight against misinformation wrap up 2020
KUALA LUMPUR: The country’s golden crop was never lacking challenges — if not an anti-palm oil campaign, a trade spat sure to throw a spanner in the works and 2020 came in a package of not only these drawbacks but also a health pandemic that caused labour crunch and disruptions in the movement of goods.
Despite many attempts by the industry, which heavily depends on foreign labour, the government remained steadfast in its decision on travel restrictions to prevent the import of Covid-19 cases.
Hence, the labour issue alone is expected to dampen production by 25 per cent.
Lockdown and border closures not only in Malaysia, but also elsewhere resulted in a domino effect that wrecked the supply chain and disrupted the movement of goods and demand for the edible oil globally.
But all is not gloom, the industry, which is a major contributor to the country’s economy, was allowed to operate, albeit at 50 per cent capacity during the seven-week movement control order.
The lack of labour, coupled with weather conditions, that would affect production only means the price of palm oil increases further or remains steady in the coming months.
The palm oil industry saw a mixed performance this year compared with the previous year.
Crude palm oil (CPO) production, export volume and import were weaker while stocks, prices and export revenue have shown better performance.
Data gathered by the Malaysian Palm Oil Board (MPOB) between January and November this year showed that CPO production declined by four per cent to 17.80 million tonnes from 18.52 million tonnes in the corresponding period of 2019.
This was due to the scarcity of labour in plantations plus adverse weather condition in November and December, and it does not indicate that the production is going to increase from the past months.
The decline in CPO production caused the palm oil closing stocks to decline by 30.6 per cent to 1.56 million tonnes in November 2020 from 2.26 million tonnes in November 2019.