Malaysia’s palm oil output to rise on return of workers to pre-pandemic levels

Malaysia’s palm oil production for marketing year (MY) 2021/22 is estimated at 19.0 million metric tons, up 2 percent from last month and 6 percent from last year, the U.S. Department of Agriculture (USDA) said in its latest monthly report.

The harvested area remains unchanged from last month at 5.45 million hectares but is up 1 percent from last year. The yield is estimated at 3.49 tons per hectare, up 2 percent from last month and 5 percent from last year, the USDA said.

Since MY 2020/21, Malaysia’s palm oil output has been negatively impacted by COVID-19 and its strain on the palm oil sector workforce. As a measure to curb the spread of COVID-19, the government of Malaysia closed its borders, which essentially eliminated the main source of skilled workers that harvest palm oil.

Migrant workers, mainly from Indonesia, comprise 80 percent of Malaysia’s workforce. Even with ideal weather conditions, palm oil harvest operations have failed to keep up with demand due to the workforce shortage, the USDA report said.

According to the Malaysian Palm Oil Board, monthly crude palm oil output has continued to trend below the 5-year average and the latest reports indicate output for the month of February is down 13 percent from the 5-year average.

With the drastic decline of COVID-19 cases, as compared to last year, the Malaysian government is slated to reopen its borders and anticipates the return of migrant workers to pre-pandemic levels. The return of the migrant workforce will benefit palm oil harvest operations, the report pointed out.

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