Business

Wednesday June 27, 2012

Palm oil sector players told to brace for challenges ahead

By HANIM ADNAN
nem@thestar.com.my


KUALA LUMPUR: Diverse issues on palm oil such as limited land supply, labour shortage, biomass utilisation, food security, certification standards, development in Indonesia's oil palm sector as well as Africa as the new frontier in global oil palm cultivation and investment hogged the limelight at the close of the 7th International Planters Conference (IPC 2012).

At a panel discussion yesterday, conference participants were told that with the world demand for palm oil expected to continue registering strong growth, the industry players and investors needed to carefully strategise and well-positioned themselves to stay competitive and able to meet with the challenges and threats ahead.

A panelist, Kuala Kepong Bhd (KLK) plantation director Roy Lim said given that “money does not grow on trees” in the case of palm oil, the labour shortage in the local plantations must be seriously addressed.

Lim: Malaysia is too dependent on Indonesian workers

While the long-term solution for Malaysia's labour shortage problem in the estates still has yet to be identified, he suggested the Government to open up more sources i.e. countries where foreign labours could be easily obtained.

“Malaysia is too dependent on Indonesian workers to work as fruit collectors and harvesters in in the local oil palm estates. This is just a short-term measure.

“However, now Indonesia itself is aggressively cultivating and expanding its oil palm hectarage. For example, north and east Kalimantan are also sourcing labour force from Java and Lombok to work in the vast oil palm plantations there,” he added.

For KLK, he said the group's estates in Peninsular Malaysia and Sabah were currently 45% and 90% respectively dependent on foreign labour.

According to Lim, another solution to the labour shortage problem would be to improve and undertake more research on mechanisation. In addition, the Government could look at re-organising the labour workforce in the estates whereby the husband can be the fruit harvester while the wife can become the fruit collector.

Another panelist, the Roundtable On Sustainable Palm Oil (RSPO) secretary-general Darrel Webber said there had been a rising trend in the world markets which were demanding for standards, eco-labellings and labels for the various types of commodities and goods.

“The world has become label mad,” he said, adding that the European Union for example had made it mandatory labelling for all vegetable oils including palm oil by 2014 while Britain is making it mandatory carbon emission reporting for all its companies by next year.

Webber said the RSPO, which certified the production of sustainable palm oil had become the point of reference among many other commodities like coffee, cocoa and timber given its success for being a globally recognised sustainable standard.

On new frontiers for oil palm, Sime Darby Plantations Sdn Bhd principal scientist II Dr Claude Bakoume, meanwhile, said Africa was

opening up more new areas for oil palm. “About 23 out of 54 countries in Africa have been identified as palm oil producers. The land available for oil palm is about 8 million ha.”

He said Africa, by 2040, would see a population of 1.1 billion of working age, an ample workforce for the plantation sector. Currently, the total area planted with oil palm in Africa is about 1.8 million ha whereby 50% are smallholdings and 50% industrial plantations.

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