Losses have run into billions of ringgit, and that is just in the oil palm sector alone.
The reluctance of Malaysians to be engaged in the 3D (dirty, dangerous and difficult) jobs has left businesses with little choice but to look offshore for workers.
Indonesians were among the first to make the trek to Malaysia to work in construction sites and plantations, but over the years, many others, such as Filipinos, Bangladeshis, Myanmar and Nepali nationals have joined their ranks.
When the Covid-19 pandemic hit, hundreds of thousands of these migrant workers returned home but with business operations returning to normal, the hunt for workers has reached a feverish pitch.
However, a disagreement on the recruitment process led Indonesia and Bangladesh to put a stop to sending their citizens to work in Malaysia.
The oil palm sector, which is almost fully dependent on migrant labour, has been most severely hit by the halt in the entry of migrant workers.
Malaysian Palm Oil Board (MPOB) director-general Ahmad Parveez Ghulam Kadir told FMT Business that as of May, there was a shortage of 54,190 workers in the sector, of whom 53.4% or 28,940 workers, were needed as fresh fruit bunches (FFB) harvesters and collectors.
Given that the average productivity of a harvester is around two tonnes of FFB per day, Ahmad Parveez estimated that about 57,800 tonnes of FFB would have been left unharvested each day.
“Taking into consideration that there are 26 work days in a month, it is estimated that we would have left 1.5 million tonnes unharvested each month from January to May,” he said. In short, they have been left to rot.
At an average price of RM1,390 per tonne for FFB and RM6,300 per tonne of crude palm oil (CPO), the oil palm growers would have lost RM10.46 billion over the period.
The price of CPO now stands at RM4,119 per tonne, compared with the historical low of RM3,631.50 per tonne on July 15.
Despite having reached an agreement with both Dhaka and Jakarta, and the July 18 decision by the home and human resource ministries to expand the list of countries from where workers could come to Malaysia, there has been little respite for the sector.
For instance, the Malaysian Anti-Corruption Commission probe into allegations of irregularities in the selection of 25 Bangladeshi firms as agents is still in progress, and it has caused delays in processing applications from that country.
Ahmad Parveez said MPOB has been monitoring the number of workers being employed and the shortage that plantation companies continue to face.
Under the newly introduced Foreign Worker Centralised Management System (FWCMS), Malaysia will now accept workers from Thailand, Bangladesh, the Philippines, Cambodia, Myanmar, Laos, Vietnam, Kazakhstan, Nepal, Pakistan, Sri Lanka, Turkmenistan, Uzbekistan, Indonesia and India.
Foreign workers intending to work in Malaysia must now apply through the FWCMS.
Developed by Bestinet Sdn Bhd, the system links various stakeholders in the processes of recruitment, management and monitoring of foreign workers in the country.
On the upside, the Real Estate and Housing Developers Association (Redha) has welcomed the introduction of the FWCMS.
Redha acting president NK Tong expressed confidence that the construction and housing development sector will soon overcome the manpower shortage.
“Hopefully with the lifting of this freeze, the construction industry will be able to have access to more workers in a timely manner to remove any bottlenecks that have resulted since the pandemic and the subsequent reopening of the economy,” he told FMT Business.
Plantation industries and commodities minister Zuraida Kamaruddin expects the system to facilitate a smoother intake of workers by the end of August.