Malaysian palm oil production has declined for three years in a row due to labor shortages

The Malaysian Palm Oil Association forecasts that Malaysian palm oil production will decline for the third year in a row as labor shortages on palm oil plantations continue to hurt harvests.

According to the Malaysian Palm Oil Association, which represents 40% of the country’s total palm oil plantations, Malaysian crude palm oil production is estimated at 18 million tons for the full year 2022.

While the Malaysian palm oil industry relies on foreign labor, Malaysian authorities have struggled to provide enough workers since the government relaxed COVID-19 restrictions.

When there is not enough labor, many plantation owners have to stop harvesting and let the mature palms rot on the trees.

The Palm Oil Association projected palm oil production of 18.5 to 18.7 million tons this year, followed by 18.1 million tons in 2021 and 19.1 million tons in 2020, with yield losses ranging from 15% to 25% or higher due to labor shortages.

The palm oil industry is short 120,000 workers, although some foreign applications have been approved under government quotas. But there are also administrative and procedural errors that can prevent workers from getting to work in time for the most productive palm season.

The months of August to October are the main harvesting season in Malaysia.

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