KUALA LUMPUR: The Sarawak Oil Palm Plantation Owners Association (Soppoa) has appealed to the government to look into the plight of planters burdened by higher costs.
In a statement today, Soppoa expressed concerned following Human Resource Minister M. Kulasegaran’s announcement that the government will raise minimum wages from next month.
Currently, the minimum wage in Peninsular Malaysia is RM1,000 per month while in Sabah and Sarawak, it is RM920.
When contacted, a Soppoa spokesperson noted the association is seeking to meet with the newly-sworn in Primary Industries Minister Teresa Kok.
"We seek constructive engagement with Primary Industries Minister Teresa Kok before the government implements measures that will negatively impact the industry," he said in a telephone interview from Kuching, today.
He said oil palm planters in Sarawak, being newcomers in the industry, would be hard hit by this wage increase proposal that is not linked to productivity.
"Any increase in the cost of production like wages while palm oil prices are low, will impact heavily on the bottom line of planters in Sarawak and make us even less competitive," he said.
"We appeal to the government to seriously reconsider the issue of increase in minimum wages in the plantation sector, at this juncture, when weak oil palm prices are already causing much burden," he said.
Depending on the year of planting, he said, Soppoa members calculated that palm oil production cost of these heavily-geared planters ranges between RM1,500 and RM3,000 per tonne.
The Soppoa spokesperson noted the national average yield for fresh fruit bunches was 17.89 tonnes per ha while Sarawak’s average yield only amounted to 16.13 tonnes per ha.
This means that planters in Sarawak are faced with higher cost per ha of planted oil palm compared with those in other parts of Malaysia.
The Malaysian Palm Oil Board’s statistics revealed that last year, palm oil prices averaged at RM2,686 per tonne.
In the first half of this year, however, there is a RM362 shortfall with prices averaging at only RM2,324.
“If palm oil prices were to fall further from the current RM2,300 per tonne average pricing”, the Soppoa spokesperson said, “some of our members would face difficulties in repaying bank loans.”
Planters would then slip into a vicious circle of hiring less hands and there would be less harvest of oil palm fruits.