Malaysian oil palm associations demand minimum wage hike delay, 36 pct raise ‘too high’

Oil palm plantation (file photo).

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KUCHING, April 7: Eleven associations representing the Malaysian oil palm supply chain have called for the postponement of the RM1,500 monthly minimum wage, which is set to take effect on May 1, 2022, because the 36 per cent increase would be a significant hike for planters in rural areas still recovering from the Covid-19 pandemic, amid crop losses, labour shortages, movement restrictions, and higher input costs.

According to a statement released on Wednesday, the associations support revising the minimum wage, but assert that the proper approach should involve stakeholders under the National Wages Consultative Council (NWCC) to strike a balance between worker welfare and the impact of a wage increase on employers.

“Until then, we are calling for a postponement in implementing the revised minimum wage followed with its phased implementation to provide soft landing on its impacts.

“Any increase in gazetted minimum wages cannot be retracted once implemented, and will invariably have a bearing on production costs and the competitiveness and viability of businesses in Malaysia. The plantation sector is no exception,” they said.

The eleven associations stated in their statement that all economic sectors in Malaysia need adequate time to make the necessary adjustments following the worst of the Covid-19 pandemic, and time as well to find solutions to the higher costs of essential materials resulting from the Russia – Ukraine conflict.

“The roll-out of any minimum wage policy should be done in an orderly manner to ensure all business sectors, including the palm oil supply chain are able to sustain the economic growth of the nation without adding inflationary pressure,” they stated.

They went on to say that while many remark that the palm oil sector, particularly upstream players, is currently profiting handsomely from record-high palm oil prices, this trend cannot be expected to continue forever.

The price of palm oil hit a record high of above RM7,100 a tonne in early March supported by tight supply amid a drought in South America that affected soybean production, and supply bottlenecks for sunflower oil in the Black Sea region, but within a month, Malaysian palm oil futures have already declined about RM1,300 to around RM5,900 a tonne, they explained.

The eleven associations are the Malaysian Estate Owners’ Association (MEOA), the National Association of Smallholders Malaysia (NASH), the Sarawak Oil Palm Plantation Owners Association (SOPPOA), the East Malaysia Planters’ Association (EMPA), the Palm Oil Millers Association of Malaysia (POMA), the Malaysian Oleochemical Manufacturers Group (MOMG), the Malayan Edible Oil Manufacturers’ Association (MEOMA), the Malaysian Biodiesel Association (MBA), the Incorporated Society of Planters (ISP), the Sabah Employers Consultative Association (SECA), and the Tawau Agricultural Association (TAA). — DayakDaily