KUALA LUMPUR:Malaysia said on Thursday it viewed U.S. allegations of forced labour in palm oil plantations as an "old issue" but it was willing to take appropriate action if needed.

Last month, the U.S. Customs and Border Protection (CBP) banned the imports of palm products from FGV Holdings on suspicion of forced labour in its manufacturing process, and Malaysia said it anticipated another plantation firm could be banned as well.

In a statement on Thursday, Plantation Industries and Commodities Minister Mohd Khairuddin Aman Razali said the country had already halted the recruitment of new foreign workers.

"Therefore, the issue of forced labour raised and reported by the U.S Department of Labour is an old issue and has been taken action by the industry," he said.

"However, with the increasing incidents, MPIC is ready to consider appropriate action to address the issue," he said, using the ministry's acronym.

The world's second largest palm producer has stopped the entry of new foreign workers from June until the end of the year as part of COVID-19 containment measures, but planters said it has exacerbated a long-standing labour shortage and impacted production. 

Meanwhile, labour groups allege that thousands of foreign workers employed by the industry remain subject to forced labour conditions.

Mohd Khairuddin said the government views the U.S. allegations seriously and the two countries need a fair platform to address the allegations that could affect bilateral trade.

"Undoubtedly, the U.S. is an important market for Malaysian agricultural products which is one of the largest contributors to the country's export earnings," he said.

Malaysia exported 14.1 billion ringgit ($3.40 billion) worth of agricultural commodities to the United States from January to August this year, he said.

The United States is Malaysia's second largest agri-commodity trading partner, accounting for 15% of the nation's exports during the first half of 2020, according to government data.