Palm Oil Producers Reopen in Sabah

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The Malaysian state of Sabah allowed palm oil plantations and mills to reopen last month after setting conditions aimed at preventing the spread of Covid-19.

The action may prevent a potentially heavy crop loss in one of the world’s largest palm oil producing areas and ease supply disruption of a popular base stock for the manufacture of biobased lubricants.

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Sabah is the top palm oil producing state in Malaysia, which is the world’s second-biggest producing country behind Malaysia. In March the state government had ordered palm oil plantations and mills in six of its districts to close, out of concerns that working conditions there were ripe for the spread of Covid-19.

The Malaysian Estate Owners Association, which represents plantations, and the Malaysian Palm Oil Association subsequently petitioned the government to allow members to reopen, warning that a U.S. $100 million crop might be lost if operations remained shuttered.

On April 10, the state announced that plantations and mills in all the six districts could reopen as long as they complied with several conditions. If any worker at any plantation or mill is found to have Covid-19 or to come into contact with an individual under investigation for possibly having the disease, then that site must close. Plantations, which rely heavily on foreign workers, were required to establish quarantine centers for workers returning to Sabah, and those workers must quarantine for 14 days before resuming work.

Plantations and mills are also required to adhere to social distancing practices prescribed by the state health ministry.

A week after the ban on operations was lifted, the government temporarily closed one of the nation’s largest palm oil plantations, Felda Sahabat, for allegedly failing to comply with conditions for reopening, according to local news reports.

Sabah is responsible for 25 percent of palm oil production in Malaysia.

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Base Stocks    Disruptions    Malaysia    Plants & Equipment    Plants & Facilities    Region    Southeast Asia