KUALA LUMPUR (March 5): Malaysia's Sime Darby Plantation Bhd, the world's largest palm oil producer, expects 2024 production growth to rise at least 5% from last year, as the country's labour situation improves, a top executive said on Tuesday.

Sime Darby Plantation group managing director Mohamad Helmy Othman Basha said the firm's higher production this year will be driven by reducing its reliance on foreign labour through a shift to automation and local worker recruitment.

“We believe there will be a growth in our production (for 2024)... We think it's above 5%,” Helmy said in an interview on the sidelines of the Palm and Laurics Oil Price Outlook Conference 2024.

Sime Darby Plantation's fresh fruit bunches (FFB) production was 8.71 million tonnes in 2023, a 6% increase from 2022, the company said last month. The firm’s oil extraction rate last year was at 21.18%, slighlty up from 2022.

Helmy said the company had sufficient workers and would not need to bring in new harvesters until 2026.

Malaysia's palm oil industry, which relies on foreign workers for 70% of its plantation workforce, has suffered a labour crunch in recent years, in part because of the Covid-19 pandemic. The labour shortage eased last year with the return of foreign workers to the country.

In a speech at the conference on Tuesday, Malaysian Plantation and Commodity Minister Johari Abdul Ghani said improved labour market conditions in the world's second-biggest producer of palm oil would increase its 2024 crude palm oil production marginally by about 1% compared to last year.

The Malaysian Palm Oil Board expects production at 18.75 million tonnes in 2024, compared to the 18.55 million tonnes in 2023, driven by the improving labour situation.

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