Malaysian Plantation Sector Costs Expected to Rise on Higher Minimum Wages
Dow Jones
Oct 06
0201 GMT - Higher minimum wages in Malaysia could raise labor costs for plantation companies, with a 2,000 ringgit monthly rate estimated to add around 110 ringgit a ton to crude palm oil production costs, UOB Kay Hian analyst Amerul Iqmal and team say in a note. The minimum wage rate is due to be announced in the Budget 2027 on Oct. 9, with 2,000 ringgit-2,200 ringgit being discussed as possible new rates, up from the current 1,700 ringgit a month. Smaller estates and smallholders could remain exempt, limiting their cost impact, they say. Higher wages could also accelerate mechanization as planters seek to improve worker productivity and offset rising costs. UOB KH maintains an overweight stance on Malaysia's plantation sector.
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