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Malaysia. Crude palm oil production downward to 18 MMT
05.01.2022 13:25 "Agro Perspectiva" (Kyiv) —
Following are selected highlights from a report issued by a U. S. Department of Agriculture attache in The Kuala Lumpur, Post lowered the marketing year (MY) 2021/22 crude palm oil (CPO) production estimate at 18.0 million tons due to extreme weather recorded in December 2021 and lack of progress in resolving the labor issue since 2019. On December 16, a tropical depression caused by the super typhoon Rai led to torrential downpours throughout Peninsular Malaysia, where a month’s worth of rainfall was recorded in a single day. This resulted in massive flooding across Peninsular Malaysia, and palm plantations located below sea level remain inundated with flood water for weeks. Post anticipates it will take months for the affected plantations to recover their production as many are inaccessible due to muddy ground. Post estimates the flood cost the industry around 1.1 percent of annual CPO production for 2021/22. Labor issues remain the largest long-term constraint for the industry. Based on industry feedback, although GOM finalized an MOU on migrant labor with Bangladesh, the industry continues to prefer Indonesian migrant workers, who share similar culture and language and are more willing to work in the plantation sector. As of late December, the Indonesian government is yet to sign an MOU with GOM on migrant labor and this delay has cost the industry dearly. It is estimated Malaysia lost around RM 9 billion in 2020 and RM 6 billion in 2019* due to the acute labor issue faced by the industry. To ensure the industry operates at an optimum level, in late 2021 the Ministry of Plantation Industries and Commodities (MPIC) approved the recruitment of 32,000 migrant workers to work in the palm oil industry (pending MOUs with sending governments). However, the emergence of new COVID-19 variant Omicron complicated the situation as GOM delayed the opening of its international border for migran workers.
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