Coconut Processing Firms Lay Off Workers amid Dearth of Raw Material

Two coconut processing companies based in Riau have laid off a total of 3,500 workers as they struggle to maintain production in the face of a shortage of the fruit as a key raw material, The Jakarta Post reported on March 18.

The news was brought to the surface by an Instagram post that mentioned PT Pulau Sambu or Sambu Group who laid off 1,700 workers on top of PT Riau Sakti United Plantations who also laid off 1,800 workers who had been working for under 5 years.  According to the Confederation of Indonesian Trade Unions (KSPI) chair Said Iqbal, the layoffs were due to a coconut shortage that pressured the companies’ production.

The shortfall of coconuts was caused by extreme weather changes and pests, as well as an export policy that was said to disrupt domestic supply.  Statistics Indonesia (BPS) noted that 71,077 MT of coconuts was exported in the first two months of this year valued at USD30.8 million. Bulk of the shipment went to China at 68,065 MT, followed by Vietnam at 2,180 MT and Thailand at 550 MT.  Last year, Indonesia exported 431,815 MT of coconuts, increasing from 380,883 in the previous year.