Palm oil farmers say U.S. ban to hurt more than 32,000 planters

Malaysia’s palm oil planters condemned the U.S. block on imports of FGV Holdings Bhd. products, saying the move will affect more than 32,000 farmers.

The National Association of Smallholders Malaysia called the ban a “reckless act” and said it will worsen the commodity’s reputation as it’s also facing anti-palm oil campaigns in Europe. The group said the U.S. Customs and Border Protection’s accusation that FGV uses forced labor is unfounded, as most workers operate their own farms.

The U.S. Customs order is the result of a yearlong investigation that revealed labor abuses, deception, restriction of movement, isolation, intimidation and physical and sexual violence, according to its statement.

The import ban is another blow to the palm oil industry, which is struggling with the drop in demand for cooking oil as the pandemic keeps restaurants shut. In Malaysia, the world’s second-largest producer, plantations grapple with a worker shortage as the country has restricted travel, even resorting to prisoners for help.

FGV, one of the world’s top producers of the edible oil, has been in talks with American authorities since August last year and has taken steps to uphold labor standards, it said in a Thursday statement. Another major producer, Sime Darby Plantation Bhd., said it’s concerned about also being hit by action from the U.S., as a non-governmental organization had filed a petition of concern over forced and child labor on its plantations.