Sime Darby Plantation Bhd shares fell 23 sen to close at 5.07 amid news Italian confectionary giant Ferrero was withdrawing from sourcing its palm oil.
The withdrawal was believed to have taken place starting April 6 across the supply chain globally, was made following a forced labour allegation raised by the United States Customs and Border Protection.
According to Reuters, the confectionery group only ordered a relatively small amount of palm oil from Sime Darby Plantation and it is not a direct purchase. It also quoted the plantation company as saying that it has taken steps about human rights issues.
The US Customs and Border Protection said in January that it had evidence that Sime Darby Plantation was using forced labour and this was followed by a seizure of its goods a few months later.
Reuters reported that Malaysia’s labour practices have come under scrutiny in the past two years, with six companies including Sime Darby Plantation banned by US customs over forced labour allegations.
