Two coconut processing firms in Riau, Indonesia, have laid off 3,500 workers amid a coconut shortage impacting production. PT Pulau Sambu, also known as Sambu Group, and PT Riau Sakti United Plantations have released 1,700 and 1,800 workers, respectively, due to this supply issue.
The Confederation of Indonesian Trade Unions (KSPI) chair, Said Iqbal, confirmed the layoffs, attributing them to a scarcity of coconuts. "The layoffs are true. We have checked it. It was because of a shortage of raw materials. I have checked it with KSPI Riau," he stated.
The coconut shortfall results from extreme weather, pests, and an export policy affecting domestic supply. Statistics Indonesia (BPS) reported that the country exported 71,077 tons of endocarp coconuts in the year's first two months, valued at US$30.8 million. China imported the majority, followed by Vietnam and Thailand.
In the previous year, Indonesia exported 431,815 tons of coconuts, up from 380,883 tons the year before. Affected workers have been informed of compensation plans and potential rehiring when supply stabilizes.
Deputy Manpower Minister Immanuel Ebenezer Gerungan acknowledged the situation, stating, "I have just heard about that information, we'll check it. If it's a raw material crisis, that happens a lot; importing is difficult." He indicated his office would verify the information due to the companies' significant workforce.
Trade Ministry official Farid Amir cited El-Nino as a factor in declining coconut production, stating, "Because of El-Nino, coconut production in Indonesia went down. Simultaneously, there was an increasing demand in the global market, causing raw material supply for [the domestic] coconut processing industry [to be] scarce."
Farid noted that coconut exports have not been restricted due to balanced demand and supply but mentioned a government agreement to impose a levy on coconut exports and derivatives. The industry's proposal for an export moratorium is under consideration, requiring further deliberation.
Source: Asia News Network