Malaysian palm oil output to drop for third year on labor crunch

By Anuradha Raghu, Bloomberg

Malaysian palm oil production is set to decline for a third year as a worker shortage in plantations continues to hamper harvesting, according to the nation’s largest group of growers.

Total crude palm oil output for 2022 from the world’s second-largest grower will be 18 million tons, said Joseph Tek, the new chief executive of the Malaysian Palm Oil Association, which represents 40% of planted palm by area in the country.

Malaysia’s palm oil industry is reliant on overseas workers and authorities are struggling to bring in people fast enough since pandemic restrictions eased. Without enough boots on the ground, many planters are having to cut harvesting and leave ripened fruit rotting on trees.

Under its previous leadership, the association had forecast production of 18.5 million to 18.7 million tons for 2022. Output was 18.1 million tons last year, and 19.1 million in 2020. There are crop losses ranging from 15% to 25% or even higher due to the labor crunch, according to Tek.

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