KUALA LUMPUR, July 20 -- Plantation sector mainly palm oil and rubber, which are the two top contributors to the gross domestic product (GDP) for agriculture industry are in dire need of workers to speed up their production capacity due to higher demand, especially for the rubber gloves as the world battle against coronavirus.
Sadly, this industry was deemed as the 3D industry – dirty, dangerous and difficult (some even say demeaning) by the locals, resulting in companies to hire more foreign workers.
As of March 31, 2020 it was estimated that there are more than 500,000 workers involved in this sector and under plantation, palm oil has the highest reliance on foreign workers, which is at 77 per cent mainly from Indonesia and Bangladesh.


Reports by the Malaysian Palm Oil Board showed that palm oil sector currently faces a shortage of 31,387 labourers while the rubber sector, according to Malaysian Rubber, Glove Manufacturers Association (MARGMA) needs at least 25,000 additional manpower.
Despite moves towards automation, the Malaysia Palm Oil Association (MPOA) chief executive officer Datuk Mohd Nageeb Abdul Wahab said palm oil sector still rely on the foreign workers, especially for the harvesting job, which is the core in the sector.
“We are asking the government to help us to get unemployed Malaysians that was impacted by the pandemic to come and work for us. However the response among the locals has been lukewarm,” he told media during Invest Malaysia 2020 - Virtual Series 2.
The statistics department recently reported that Malaysia’s unemployment rate increased to 5.3 per cent in May 2020 from five per cent in April 2020 as the number of unemployed rose by 47,300 to 826,100 individuals.
Mohd Nageeb said with the extra number of workers, the industry would be able to produce more crude palm oil (CPO), getting extra revenue for the companies which in return can be used to buy and apply more fertiliser thus improving the yield.
Increasing the palm oil yield, according to him, is crucial, as Malaysia has pledged to cap its oil palm cultivation area of 6.5 million hectares by 2023.
In his presentation earlier, Mohd Nageeb said the plantation sector has been paying the largest tax to the government, therefore it hopes that the government can permit its request for extra workers.
The recruitment policy was one of the MPOA 2021 budget wishlist demands besides making radical changes in the tax structure.
He said, the association, is still hoping for the government to increase the windfall tax threshold level from RM2,500 per tonne to RM2,750 per tonne, if not RM3,000 per tonne for Peninsular, as the industry was facing higher production cost.
“When the windfall tax was introduced, our cost of production was about RM1,000 but now our cost is RM1,500 to RM2,000,” he said.
The windfall tax kicks in when crude palm oil (CPO) price exceeds RM2,500 per tonne and planters pay about 15 per cent tax on the surplus.
When asked about crude CPO price for 2020, he said prices were expected to hover around RM2,400 - RM2,500 per tonne which was a comfortable level for the industry.
As for the rubber sector, MARGMA vice president Dr Supramaniam Shanmugam said the country’s rubber glove industry was projected to produce an additional 20 billion pieces of gloves or 17 per cent production growth this year post-COVID-19.
This, he said, would help to contribute a total of 220 billion gloves.
“Our export revenue is expected to record RM21.8 billion this year backed by continued strong demand for gloves globally.
“We expect Malaysia to supply about 67 per cent or 220 billion gloves of the global demand this year.
“During the pre-COVID-19 period, Malaysia recorded between 12 per cent and 15 per cent in production growth and during COVID-19, the industry posted 20 per cent growth,” he said.
As for the first quarter of 2020, he noted that the local glove industry sold 55 billion pieces of gloves and out of that, 99.6 per cent were exported.
Dr Supramaniam said the local glove industry invested between RM600 million to RM1 billion annually for the organic expansion following the increase in global demand averaging about 10 per cent to 12 per cent without the pandemic.
Currently, the industry employs 71,800 workers, of which 28,000 were locals and 43,800 were foreign workers.
-- BERNAMA

https://www.bernama.com/en/business/news.php?id=1862362
Source: bernama.com