KUALA LUMPUR: Malaysia’s palm oil production is expected to improve this year as a labour shortage eases, industry regulator Malaysian Palm Oil Board (MPOB) said on Thursday.

MPOB Director-General Ahmad Parveez Ghulam Kadir told a seminar that output in the world’s second-largest producer should come in at 18.75 million metric tons while stocks are seen at 1.95 million metric tons this year.

“For 2024, the labour situation is expected to improve but the concerns on availability are still there,” he said, adding that while 2023 showed a mixed performance, most key indicators are expected to improve this year.

Malaysia’s palm oil sector, which relies on foreign workers for 70% of its plantation workforce, saw a severe labour crunch in recent years, in part due to the COVID-19 pandemic.

Labour shortages started to ease in 2023 as the arrival of migrant workers picked up, but plantation firms and analysts have raised concerns about potential disruptions in labour supply.

Palm ends up after Malaysia stockpile hits a four-month low

Exports are seen at 15.6 million tons versus 15.1 million tons last year, while the price of crude palm oil should range between 3,900-4,200 ringgit per ton, he added.

“Malaysia palm oil stocks are expected to be below 2 million tons this year, which should stabilise prices,” he added.

The El Nino weather phenomenon, which brought dryness to large parts of Asia last year is forecast to continue into the first half of 2024, threatening global palm oil production and prices.