ENTRY OF FOREIGN WORKERS TO PLANTATION INDUSTRY SET TO GENERATE RM4 BLN REVENUE - MPOA

Malaysia's palm oil industry is set to generate RM4 billion in revenue if half of the indicated 40,000 foreign workers needed by the sector are allocated harvesting duties, said the Malaysian Palm Oil Association (MPOA).

In a statement, the association expressed its gratitude to the Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani following the admission announcement, saying that the decision comes as a relief for the oil palm industry, which has been grappling with a substantial shortage of workers.

Earlier, the minister had said that the Ministry of Home Affairs concurred that, apart from the plantation sector, entry of foreign workers will not be permitted into Malaysia.

"In light of the recent announcement indicating the admission of 40,000 workers into the plantation sector, assuming that half of them are allocated to harvesting duties, constituting a workforce of 20,000 dedicated harvesters, a significant economic impact is poised to unfold,” MPOA said.

It noted that assuming each harvester can efficiently cut one tonne of fresh fruit bunches (FFB) per day over 260 working days per year, and with the current FFB price standing at RM750 per tonne (equivalent to crude palm oil at RM3,800 per tonne), the potential "losses" in a crop that can be harvested and recovered now amount to a 5.2 million tonnes of FFB.

"This translates to a staggering revenue of close to RM4 billion. The implications of this substantial economic activity extend beyond the industry itself, as it stands to generate an additional RM0.5 billion into the government coffers through taxation, based on an estimated 13% of the revenue, aligning with the fiscal dynamics observed in the year 2022,” MPOA added.

It noted that these figures demonstrate not only the economic prosperity generated within the sector but also its cascading impact on government revenue.

"This aligns seamlessly with the concept of MADANI, emphasising our shared destiny and the collective benefits derived from concerted efforts in driving economic growth and sustainability,” it noted said.