Labor shortages have also affected palm oil production at the world’s second-largest producer, Malaysia. The yields of the world’s most consumed oil are likely to remain low for the next few months, Bloomberg reported.
According to Nagib Wahab, CEO of the Malaysian Palm Oil Association, production in the country could be below 18 million tonnes this year. That would be a 6% drop.
Palm oil was the leading engine of this year’s rally on world vegetable oil markets and several times set new price records.
“Even before the pandemic, we were already suffering from labor shortages, but so far we have not been in a similar situation,” Nagib said.
According to him, the shortage of employees is becoming more serious from month to month and will be long-lasting.
Production levels may return to normal in the second quarter, but 32,000 workers will be employed in the sector, experts say.
Malaysian Prime Minister Ismail Sabri Jacob has announced that the country will allow fully vaccinated migrant workers into the industry.
According to forecasts, the most used vegetable oil will be traded between 955 and 1050 dollars per ton in October – February. This was stated by the director of one of the leading traders Godrei International Ltd Darab Mistri.
By comparison, this year, futures are trading at an average of about $ 930 a tonne, according to Bloomberg.
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