MPOC: 17.6m tonnes of CPO output achieveable

MALAYSIA'S oil palm industry is hopeful of producing 17.6 million tonnes of crude palm oil this year as the government eases its foreign labour hiring rule and more trees mature.

"The forecast is not too ambitious because it is a reversion to 2009's level. We should be able to achieve it," said Malaysian Palm Oil Council (MPOC) chairman Datuk Lee Yeow Chor.

He was speaking to Business Times at an economic conference organised by the Asian Strategy & Leadership Institute in Kuala Lumpur yesterday.

CPO output has fallen for the last two years. In 2009, output dipped to 17.6 million tonnes from 2008's record high of 17.7 million tonnes. And last year, it plunged further to 17 million tonnes as planters complained of acute shortage of foreign workers to harvest fruit bunches and abnormal heavy rainfall made it difficult to bring fruits to mills.

Some planters are worried that rainy days could hinder current fertiliser input and crimp oil palm yields six months later. To this, Lee assures that such anxiety is not felt across the board. "Delayed manuring by a few months at certain estates doesn't affect overall yield. Oil palms are very resilient."

Lee also thinks CPO price will stay firm in the next three months as global demand continue to exceed supply. Yesterday, the third month benchmark crude palm oil futures on the Malaysian Derivatives market rose RM15 to close at RM3,685 per tonne.

At a recent industry dialogue, Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said the government has allowed plantations to hire foreign workers for up to 10 years. He also said the Sabah government will soon adopt this policy soon. In recognition of the dwindling availability of foreign labour from Indonesia and the Philippines, it has now allow Bangladeshis to work in plantations.

Dompok assured planters that his officials are discussing with the Home Affairs Ministry to fast track en bloc foreign workers quota approvals.

Currently, the oil palm industry hire slightly more than 200,000 foreign workers, a sharp fall from more than 300,000 five years ago.

In a separate interview, Malaysian Palm Oil Association (MPOA) chief executive officer Datuk Mamat Salleh estimates that planters will soon hire up to 50,000 or 20 per cent more foreign workers. "We appreciate the efforts by our minister to set up a Human Resources Centre for Commodity Sector in consultation with the industry," he said.

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