KUALA LUMPUR (March 31): The closure of palm oil estates and mill operations in three additional districts in Sabah amid the rising trend of Covid-19 cases has been seen as a cause for concern for the palm oil industry.
In a joint statement, the Malaysian Palm Oil Association (MPOA) and the Malaysian Estate Owner Association (MEOA) said with the closure of operations in three additional districts yesterday, 65% of Sabah’s total planted hectarage of 1.2 million hectares and 75% of production in Sabah — translating to 100,000 workers — are now affected.
“The industry fully appreciates and understands the state government's concerns on the rising trend of Covid-19 incidents happening in Sabah and the measures that are being taken to save lives and we fully support the concerns.
"The industry, however, is even more concerned [about] the social impact [of] the closure decision as well as the resulting consequential damage to the industry,” they said.
In particular, the associations noted that idle workers who are going through confinement at their homes for long hours, without practising social distancing, and living in close proximity with each other can lead exposure to the virus.
Additionally, the MPOA and MEOA said it was difficult and impossible to stop workers from leaving, and highlighted the security and crime threat of such workers wandering around, which the associations view as defeating the objective of the movement control order (MCO).
The associations also highlighted the risk of losing its estate and mill workers, as they would have to resort to leaving the estate to search for employment elsewhere or return to their home countries for good, underlining that not all companies can afford to pay the wages of their workers without being able to function.
They added that once normal operations resume, the lack of workers will be a challenge for the industry.
“Extended harvesting rounds, high free fatty acids and default palm oil contracts are some of the examples [of] the immediate impact [on] operations,” the said.
Not to mention, there could be a total revenue loss of RM860 million for a month’s worth of closures in Sabah.
There would also be a loss of RM57 million in tax revenue from the 7.5% sales tax placed on palm oil, which could be used to combat Covid-19.
The MPOA and MEOA said the palm oil industry has already given its commitment to support the government in its ability to contain the spread of the virus by adhering to “radical and robust guidelines and SOPs” at all of its estates and mills.
“We are even agreeable to a temporary closure [of] our operating units that have employees affected by Covid-19 and taking the necessary measures to cleanse and disinfect the affected premises.
"Considering all the above factors, we humbly request and appeal to the Sabah State Government to reconsider their decision and allow us to resume operation ONLY for the essential and critical operation, [for] example harvesting, crop evacuation as well as milling during the MCO. The industry strongly feels that we can better contain the spread by continuing operations rather than curbing them,” they said.
This comes on the heels of the Sabah government’s decision to extend the shutdown for palm oil companies operating in six districts — Kalabakan, Semporna, Kunak, Tawau, Lahad Datu and Kinabatangan — to April 14.
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https://www.theedgemarkets.com/article/additional-closure-sabah-palm-oil-estates-and-mills-concern-say-mpoa-meoa
Source: theedgemarkets.com