MEDIA RELEASE 2022

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JATA LATES

MEDIA STATEMENT
INDONESIA’S PALM OIL BAN: REAP A BOUNTIFUL HARVEST
WHILE OPPORTUNITY PRESENTS ITSELF


1. Both upstream oil palm growers and downstream oil producers in Malaysia should join hands to reap the benefit of the void following neighbouring Indonesia’s decision to halt its palm oil exports. As the world's largest producer of palm oil, Indonesia imposed this ban to lower commodity prices and further address its domestic supply shortages.


2. While Malaysia sympathises with Indonesian palm oil players who will be impacted by significant shift in the demand-supply mechanics in the country, this is nonetheless the best time for Malaysian palm oil players to enhance their innovation capability while exploring the best possible strategies to meet a spike in demand by palm oil importing countries.


3. India is currently the biggest consumer of Indonesian palm oil – importing around 13.0 million to 13.5 million metric tonnes of edible oils – of which palm oil makes up around 8.0 million to 8.5 million metric tonnes (63%). Almost 45% of the quantity is expected to come from Indonesia while the remainder is sourced from Malaysia which is currently the world’s second biggest palm oil producer.


4. This has led to further tightening a market already on the edge due to Russia’s invasion of Ukraine and global warming. The prices of palm, soybean, European rapeseed and even its Canadian GMO counterpart, canola oil, have since reached historic highs following Indonesia’s action. Even as common sense would dictate that Malaysia will be an instant beneficiary by virtue of being the second-largest exporter of palm oil after Indonesia, scepticism persists on whether Malaysia is able to cope with various production challenges and constraints.


5. Daunting as it is to meet rising global demand amid labour shortage, the Ministry of Plantation Industries and Commodities (MPIC) remains optimistic that Malaysia has what it takes to fill the gap in global palm oil supply based on its market trend analytics and projection.


6. As palm oil prices will stay elevated supported by low inventory levels at both origins and destinations amid heightened price volatility, it is our hope that both the Malaysian upstream and downstream players seize the opportunity from Indonesia’s absence to maximise their revenue stream, hence earnings. After all, such opportunity only presents itself for a short-term given Indonesia will certainly re-look into its ban policy once both its domestic supply and pricing structure have stabilised. After all, it goes without saying that Indonesia relies on export taxes to fund its biodiesel programme. As market analysts expect the export ban to be lifted by the end of 2Q 2022 (around July), there is likelihood that Indonesia will flood the global market with its inventory accumulated during the ban.


7. Given that the industry enters into its seasonal peak output period during this time of the year – coupled with the prospect of South Korea which is one of the fastest growing palm oil markets releasing its stockpile – this could trigger a sharp price correction. The prospect of both Russia and Ukraine releasing their rapeseed/sunflower oil stockpiles, if any, once their conflict has subsided or settled must also be looked into. Based on these possible risks, it is only logical that both Malaysian palm oil planters and downstream industry players go all out
to take advantage of the current situation rather than to let such opportunity slip away.


8. In so doing, MPIC wants to assure industry players that it is doing its utmost best to meet demand for migrant workforce especially from upstream players. Recall that in September last year, the authorities approved the recruitment of 32,000 migrant workers for palm oil plantations which culminated in the entry of the foreign workforce into the plantation sector in mid-February this year. Malaysia is now anticipating a new batch of foreign workers to arrive in May and June, hence overcoming further manpower crunch to harvest palm fruits which otherwise can cap production. Rest assured that the process to hire foreign workers has already begun under a special quota.


9. On the longer term, the MPIC projects palm oil production and export to rise by 30% by end-2022, which comes against the backdrop of Malaysia having reopened its international borders and as the country began transitioning to the endemic phase since April 1. No doubt that although production was low due to shortage of foreign workers at the height of the COVID-19 pandemic in 2020, things are gradually returning to normal. With the workers coming back, production levels will rise and Malaysia is on track to meet global demand.

 

YB DATUK HAJAH ZURAIDA KAMARUDDIN
Minister of Plantation Industries and Commodities
10 May 2022

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MEDIA STATEMENT
MALAYSIA TO SUPPORT MODERNISATION OF CAMBODIAN
PLANTATION SECTOR
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1. CAMBODIA which recently ushered in the 65th anniversary of diplomatic relationship with Malaysia can be a land of opportunity for Malaysian downstream palm oil players who are keen to tap overseas markets.


2. As it is, Cambodia which has a population of 17 million is a large importer of Malaysian agriculture products, especially palm oil. In fact, trade volumes between the both countries have only gone up over the years. In 2021, Cambodia imported over seven million tonnes of palm oil compared with only over one million tonnes in the previous year.


3. In this regard, apart from making the Kingdom an export destination for a myriad of palm oil-related products, the Malaysian partner can embark on technology and know-how transfer which will ultimately assist the Cambodian agriculture and plantation sectors to achieve their full potential.


4. In the case of Cambodian rubber products, Malaysia is already a reference point for the standards. The same can be replicated for downstream palm oil products with more Malaysian companies investing in the development of Cambodia’s palm oil sector.


5. Malaysia is currently Cambodia’s third largest investor in Cambodia behind China and South Korea with foreign direct investment (FDI) worth US$3.53 bil from 1994-2020. Thus far, Malaysia’s investments are mainly focused on the banking, telecommunications, power generation and entertainment sectors. In 2021, bilateral trade between Cambodia and Malaysia was worth US$503.004 mil, up 13.03% over the previous year, according to the General Department of Customs and Excise of Cambodia (GDCE).


6. Cambodian exports to Malaysia stood at US$101.32 mil, up 2.22% while imports totalled US$401.7 mil, up 16.1%. All-in-all, the kingdom’s trade deficit with Malaysia for last year expanded by 21.71% to US$300.37 mil. Major Cambodian exports to Malaysia comprise milled rice, oil palm fresh fruit bunches (FFB), peppercorn, rubber, fabrics, electrical components, and other
industrial and agricultural products, while key imports include auto parts, food and beverages (F&B) and electronics products.


7. With the economy of both countries is recovering well from the COVID-19 setbacks, the Malaysian palm oil is once again penetrating into new markets with international road shows to energise the palm oil market gaining momentum. With over 70 years of experience in palm oil production. Malaysiais capable of enabling Cambodia to play catch-up to its achievement within a
span of five years with rapid technology and knowledge transfer.


8. Rest assured that European Union’s (EU) anti-palm oil campaign has not affected Malaysia’s production or exports. The allegations levelled on Malaysia over forced labour and destruction of the environment are baseless. In fact, 35% of the Malaysian palm oil bears the internationally-acclaimed Malaysian Sustainability Palmolien (MSP) certification. No other country in the world has this level of certification for their palm oil.


9. To complement palm oil downstream players who are interested in solidifying their overseas business presence, I wish to highlight that the Ministry of Plantation Industry and Commodity (MPIC) has embarked on the “Global Movement to Champion the Goodness of Palm Oil” campaign to spark awareness about the high quality of the Malaysian palm oil as well as to counter the various misinformation levelled at the country’s golden oil.


10.The Ministry is committed to strengthening the Agricommodities sector from time to time, especially the palm oil sector, to be stronger, competitive and market-oriented to meet the country's socio-economic development agenda.


YB DATUK HAJAH ZURAIDA KAMARUDDIN
CARETAKER MINISTRY OF PLANTATION INDUSTRIES AND COMMODITIES
12 OCTOBER 2022

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MEDIA STATEMENT
THE SETTING UP OF ALLEGED FORCED LABOUR WORKING COMMITTEE IS
AN EQUITABLE MOVE TO RESOLVE PALM OIL AND RUBBER ISSUES
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Washington D.C - 15 May 2022. I welcome the decision by the US Customs and Borders Protection (CBP) to set up a working committee with the Malaysian Government to address the issue of alleged forced labour. This is a move in the right direction to resolve this long outstanding issue that has unfairly plagued local industries, in particular palm oil and rubber. 

In the spirit of Keluarga Malaysia, I would like to thank Human Resources Minister YB Datuk Seri M. Saravanan for securing the commitment from the CBP to set up this working committee during his current trip to the US. During my working visit to the US from May 11 to 16, the ministry will be following this up closer with the relevant US authorities to urgently resolve it. I have several key meetings lined up and I am confident an amicable resolution is within reach in the near term.


As I have mentioned before, most of the claims of forced labour made by NGOs and other interest groups were not verified by the US authorities, which then resulted in Malaysian palm oil and palm oil products being banned. This is grossly unfair to our local industry.


The Malaysian Government has taken various initiatives to monitor and prevent forced labour. Malaysia has pledged to eradicate forced labour and child labour through ratification of ILO Fundamental Convention no. 29 (Forced Labour) and Convention no.182 (Worst Forms of Child Labour) respectively. In addition, Malaysia has ratified Convention no.98 (Collective Bargaining), Convention no.100 (Equal Remuneration) and Convention no.138 (Minimum Age) and Convention no.131 (Minimum Wage). These conventions provide useful guidance in
determining Malaysia's obligations with respect to the protection of the rights of foreign workers.


At present, Malaysia is also embarking on the BRIDGE Project with ILO, aimed at supporting government efforts at combating forced labour under Protocol 29 (Supplementary Protocol to Convention 29) as a guidance on measures to eliminate all areas of forced labour (prevention, protection of victims and access to justice) Malaysia has conducted a comprehensive study on The Labour Situation in Palm Oil Plantation Sector in Malaysia in 2018. The findings of the study have been sent to the United States Department of Labour (US DOL) and released as a public document.


On 19 November 2021, the Government of Malaysia had agreed to ratify the ILO Protocol 29 which is the Protocol of 2014 to the Forced Labour Convention, 1930, as well as Malaysia's participation as a Pathfinder country under the SDG Alliance 8.7 as part of the ongoing effort to eradicate forced labour in Malaysia. The Government through Ministry will continue to ensure that the country's commodity industry, which is one of the main contributors to the country's economic recovery after Covid-19, will continue to be protected from misleading propaganda from various quarters. I would also like to call on all Malaysians to join MPIC in their efforts to oppose the anti-palm oil campaign and continue to promote the benefits of Malaysian palm oil.


YB DATUK HAJAH ZURAIDA KAMARUDDIN
MINISTER OF PLANTATION INDUSTRIES AND COMMODITIES

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MEDIA STATEMENT
EFFORTS TO ACCELERATE EMPLOYMENT OF INDONESIAN WORKERS NEED
TO BE COORDINATED USING DIGITAL PLATFORMS


1. The Ministry of Plantation Industries and Commodities (MPIC) takes cognisance of the concerns raised by the Malaysia Productivity Corporation (MPC) in May this year that the Malaysian oil palm plantation sector could potentially be incurring losses of RM21 billion in 2021 and a further RM28 billion in 2022 if foreign workers are not brought into the country immediately.


2. The issue of the lack of foreign workers started following the closure of national borders due to the implementation of several stages of the Movement Control Order (MCO) when the Covid-19 pandemic peaked and worsened, affecting the harvesting process in farms across the country.


3. The Ministry at the same time also welcomes the agreement made by the Republic of Indonesia over the decision to re-allow the entry of its workers into Malaysia, which has been in effect since 1 August 2022, after withdrawing the restrictions before that, which were made due to concerns over issues related to rights of its (Indonesian) workers.


4. In order to simplify the process of hiring foreign workers, MPIC acknowledges that the process must be complete and efficient, hence we are all looking forward to the coordination process to be gradually switched to a fullydigitalised platform without any human interference possible.


5. For a long-term solution, MPIC encourages farm owners to provide retraining and skills improvement among local workers, in addition to practicing good labour management, which is important to keep foreign workers, employed.


6. A good labour force management policy will not only prevent foreign workers from absconding, it will also enable employers to circumvent the risk of forced labour and human trafficking which can ultimately be disruptive to their export business in the long run.


7. The Ministry will not compromise on issues related to forced labour in the country and Malaysia will continue to comply with the guidelines set in the International Labour Organization (ILO). In fact, MPIC will continue to support the National Action Plan on Forced Labour (NAPFL) which was developed in an effort to address and eradicate the issue of forced labour in the country.


8. The Ministry is confident that the noble efforts being undertaken at this time can help mobilize the 'Global Movement to Champion the Goodness of Palm Oil' campaign which, among other things, aims to explore and penetrate new markets and increase our country's palm oil exports.


YB DATUK HAJAH ZURAIDA KAMARUDDIN
MINISTER OF PLANTATION INDUSTRIES AND COMMODITIES
15th AUGUST 2022

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JATA LATES

MEDIA STATEMENT
AUTOMATION IN THE PLANTATION SECTOR AS A LONG -TERM
SOLUTION TO REDUCE DEPENDENCE ON FOREIGN WORKERS


1. The Ministry of Plantation Industries and Commodities (MPIC) will continue seeking solutions to overcome the manpower shortage in the plantation sector, especially oil palm. MPIC is aware of the woes faced by the Malaysian Estate Owners ’Association (MEOA) where a severe labour crunch of about 120,000 workers is said to be capable of causing losses in earnings by up to 5%-10%.


2. All parties should be aware that among the main reasons for the shortage of manpower in the plantation sector was due to the closure of international borders, to curb the spread of COVID-19 in the country and protect the people from the infectious disease.


3. The ministry is currently working closely with the Human Resources Ministry, Wisma Putra, the Immigration Department and the Co-operative Commission Malaysia, among others, to look into ways to expeditiously resolve this issue.


4. The Government had in September 2021 approved plans to bring in 32,000 migrant workers for palm oil estates nationwide, and MPIC remains cautiously optimistic of achieving this target, if not more, although the issue of permits had been brought to our attention.


5. Plantation owners must also in the future, be open to workers from countries like India and Pakistan, and not be too dependent on workers from Indonesia and Bangladesh. Moving forward, MPIC hopes that plantation owners will look into long-term solutions to cut down their dependency on foreign workers.


6. Through technological studies and research conducted by the Malaysian Palm Oil Board (MPOB), plantation owners are advised to increase the use of automation such as drones for the purpose of surveillance and pest control. MPIC is confident that the use of automation at plantations will attract local workers to this sector.


7. The use of greater automation will help reduce our dependency on foreign workers and make the industry more resilient in the long-run.


8. In this respect, MPIC feels that the current labour crunch in the palm oil sector will spur planters to start investing in technological tools and boost their own bottom lines in the long-run. MPIC believes that a greater uptake in automation can help position palm oil as the preferred edibl oil globally, in line with the ongoing "Malaysian Palm Oil Full of Goodness" Campaign.


YB DATUK HAJAH ZURAIDA KAMARUDDIN
MINISTER OF PLANTATION INDUSTRIES AND COMMODITIES
18 JUN 2022