KONTAN.CO.ID - KUALA LUMPUR. Malaysia's palm oil sector could generate additional output and revenue of up to 4 billion ringgit ($845.84 million) this year, following a government move that would allow plantations to hire foreign workers, an industry group said on Wednesday.

The government has imposed a hiring freeze on migrant workers since last year pending a review into recruitment practices, but said this week it would allow some to be brought in to address a shortage of about 40,000 labourers in the agriculture sector.

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Palm oil output could rise by an additional 5.2 million metric tons in fresh fruit bunches this year, if half of the 40,000 workers were allocated to harvesting duties, Malaysian Palm Oil Association (MPOA) chief executive Joseph Tek said in a statement.

"The decision comes as a significant relief for Malaysia's oil palm industry," Tek said.

Almost 80% of Malaysia's plantation workers are migrants, mostly from neighbouring Indonesia, but a prolonged labour crunch has led to estimated revenue losses of about 20 billion ringgit in 2022.

The shortage has continued to weigh on output, with crude palm oil production rising marginally by 0.5% to 18.55 million metric tons last year, Tek said.

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Malaysia's palm oil industry regulator said this month it expects output to come in at about 18.75 million metric tons in 2024.

Editor: Yudho Winarto