SIME Darby Plantation Bhd shares fell 5.47% amid news that Italian confectionary giant Ferrero is withdrawing from sourcing its palm oil.

Sime Darby Plantation shares slid 29 sen to RM5.01 at 3.48pm, with 8.43 million units traded.

The withdrawal is believed to have been underway across the supply chain worldwide since April 6.

The move was reportedly made following a forced labour allegation raised by the United States Customs and Border Protection.

Ferrero orders only a small amount of palm oil from the plantation and it is not a direct purchase, according to Reuters.

Sime Darby Plantation reportedly said it has taken steps to address human rights issues.

The US Customs and Border Protection in January said it has proof that Sime Darby Plantation is using forced labour, and followed the announcement with a seizure of goods a few months later.

Reuters said Malaysia’s labour practices have come under scrutiny in the past two years, with six companies, including the plantation, being banned by US customs. – Bernama, April 15, 2022.