The Reasons of The Increasing Palm Oil Production Cost

The Reasons of The Increasing Palm Oil Production Cost

InfoSAWIT, KUALA LUMPUR - Production cost in Malaysia’s plantations may be dramatically increasing in 2022 for the lack of workers and the increasing salary, according to Director of Godrej International Trading & Investment Pte Ltd, Dorab Mistry.

Dorab mentioned when being a keynote speaker at Palm Oil Conference and Lauric 2022 (POC2022) in the early days of March 2022, the critical lack of workers in Malaysia will be more if there is no substantial increasing salary.

“You have to give more to attack other people to be interested in this industry. The increasing worker’s salary, more expensive fertilizer will escalate production cost higher dramatically in this year,” he said, as quoted from The Edge Market.

Dorab also predicted, crude palm oil (CPO) production in Malaysia would be 19 million tons in 2022, a little bit higher than it in 2021 which reached 18,1 million tons.

Indonesia as the biggest palm oil producer is not lack of workers. He said, Indonesia could increase CPO production, at least, 2 million tons this year. He emphasized, Indonesia needs to re-think over about export tax, biodiesel program (D3), and domestic market obligation (DMO) because of inflation.

“Indonesia, though it is not lack of workers, could face salary issue. It needs to be more to balance the increasing inflation,” he said. (T2)

Source: InfoSAWIT, March 2022