Malaysian Palm Industry Wants to Reopen


Two industry associations urged the Malaysian state of Sabah this week to allow oil palm plantations and mills to reopen, advising that the industry could suffer severe setbacks if the ban on their operations – implemented to prevent spread of Covid-19 – remains in place.

Sabah accounts for 25 percent of palm oil production in Malaysia, the world’s second-largest source of the material, which is used to manufacture biodegradable lubricants, among other applications.

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Palm plantations and mills have been caught up in a number of shutdown orders issued by the national and state governments in Malaysia over the past month, most of which remain in effect. Governments have generally refused to exempt those businesses, saying they wanted to keep the pandemic from spreading through their workforce, which includes 100,000 foreign workers just in Sabah.

But the Malaysian Palm Oil Association and the Malaysian Estate Owners Association contended in an April 7 letter, that impacts on their members will be amplified if they do not resume operations soon.

“Any prolonged shutdown will only worsen the situation,” the groups wrote in their letter to the Sabah government. “Planters on the ground are already lamenting of huge crop losses and that their fields have gone unattended and weeds creeping in. This would entail remedial rehabilitation work post Covid-19, which will be a costly exercise ….”

It added that some of the foreign workers on which the industry depends have begun to leave the area after collecting their most recent paychecks and that others have not been paid and are growing restless. Owners of smaller plantations are running out of funds and food, the letter added.

Sabah officials were scheduled to consider lifting the ban on palm plantations and mills this week.

Palm oil is the world’s most common vegetable oil and a common base stock in environmentally friendly lubricants. Malaysia trails only Indonesia in production volume, and together the nation’s account for 85 percent of global supply. In addition to lubricants, palm oil applications include foods, personal care products and cosmetics.

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