Three fertilizer factories in the country have been closed for a long time due to lack of gas supply. On the other hand, the government is not able to import fertilizers as planned due to the dollar crisis. Addressing the demand for fertilizers has become a major challenge. Apart from urea, import of other fertilizers is also deadlocked. If this situation continues, food grain production may be severely disrupted. Due to lack of timely decision due to lack of timely decision due to dollar crunch as well as administrative weakness of last few months, fertilizer management has gone into complex situation.
In the current fiscal year 2024-25, BCIC Chairman Md. The delicate situation came up in an inter-ministerial meeting held recently under the chairmanship of Saidur Rahman. In the meeting, the BCIC chairman said that the production target of own fertilizer factory was 10 lakh tons in the last financial year 2023-24 without regular gas supply. Production has been 6 lakh 46 thousand tons. The production shortfall was more than three and a half lakh tons.
According to the working paper, the ‘mini peak season’ starts from last July, which will continue till September. At this time, the demand for fertilizer is 6 lakh 78 thousand tons. But currently there is only 4 lakh 35 thousand tons of fertilizer stock. The demand of fertilizer in the two months of October and November is about 4 lakh tons. Then the ‘peak season’ starts from December, which continues till March. At this time, the demand for fertilizer is about 14 lakh tons. According to that, till March, the demand of fertilizer in the country stands at 18 lakh tons.
In the meeting BCIC chairman said that currently only Ghorashal Palash Fertilizer Factory and Shahjalal Fertilizer Factory are in production. Jamuna Fertilizer Factory, CUFL Fertilizer Factory and Ashuganj Fertilizer Factory have been closed for a long time due to lack of gas supply. He said, at the same time due to the dollar crisis, fertilizers cannot be imported as planned.
In the presentation of the purchase department of BCIC in the meeting, it is said that due to disruption of fertilizer production in domestic factories, efforts were made to increase the import of fertilizers under the GTUG (Government to Government) agreement, but it was not possible due to the ongoing dollar crisis. In case of dollar crisis, opening of LCs and payment of fertilizer prices is not normal, this stock will decrease further. In the meeting, the representative of the Ministry of Agriculture said, in the overall situation, it appears that there will be a shortage of fertilizers from next January. Therefore, initiatives should be taken to increase the stock of fertilizer now. In this case, he suggested import through optional fertilizer or tender.
In the meeting, BCIC Director (Commercial) said that they are very concerned about the stock of fertilizer in the upcoming peak season. Therefore, letters have been sent to various ministries for supply of gas to start the closed fertilizer factories since last January, but no progress has been made. On the other hand, import of fertilizer from Fertiglobe in UAE under the JTUG contract has been delayed due to insufficient dollars to open LCs and make payments on time. Import of two lots of fertilizer from non-LC ad confirmed company is still pending.
BCIC General Manager (Commercial) said in the meeting, recently due to delay in payment of the price of three lots, Qatar Mint has demanded interest of 10 thousand 285 dollars. If this is not settled, import of fertilizers from the company may be disrupted. Similarly in UAE Fertiglobe has been delayed several times in bill payment. By doing this, the organization expressed its reluctance to confirm the nominated bank Mashreq Bank, Abu Dhabi LC. Fertiglobe agrees to supply fertilizer without LC confirmation on many requests. But in the recent political situation surrounding the movement, due to the temporary disconnection of communication with the company, 1 lakh 7 thousand dollars was demurred due to the fertilizer not being shipped on time. Transport company is pressing for payment of demurrage. Fertiglob has stopped fertilizing without LC confirmation.
In the meeting, the president drew the attention of the representatives of Bangladesh Bank, Sonali, Janata, Agrani and Bangladesh Krishi Bank on the challenge of opening LC, ad confirmation and payment of price for fertilizer import, they said that import of fertilizer is always given priority. But there is sometimes delay in opening LC and payment due to prevailing dollar situation. Because the supply of dollars is less than the demand, they have nothing to do.
In the meeting, the representative of Bangladesh Bank said that the ongoing dollar situation has faced many challenges in terms of payment. Dollars are not being deducted from apparent foreign exchange reserves to meet IMF loan conditions. However, despite the delay in payment in many cases, Bangladesh has not defaulted to any foreign institution. In this case, everyone’s responsibility is to present Bangladesh positively to foreign organizations. At the same time payment arrangements should be made from respective banks.
On behalf of Samakal, BCIC Chairman Md. Saidur Rahman could not be contacted. However, requesting anonymity, some senior officials of the company told Samakal yesterday that despite repeated letters, the factory could not be supplied with gas. At the same time, due to lack of sufficient dollars, the import activities did not improve. They also said that if the government does not pay attention to these issues, the situation will go to a critical stage.
The Ministry of Agriculture has written to the Ministry of Finance and Bangladesh Bank at least in the last two months to overcome the dollar crisis in the import of fertilizers. In a recent letter written to the finance adviser, the ministry said that the international organizations that supply fertilizers to Bangladesh owe 80 million US dollars. Because of this, the exporters of four countries – China, Canada, Saudi Arabia, Morocco – have stopped supplying fertilizers to Bangladesh. Besides, they are applying pressure on the Bangladesh Embassy asking for money for outstanding bills. If this situation does not improve, there will be multi-dimensional problems including fertilizer shortage in the future.
Secretary of Agriculture Dr. Mohammad Emdad Ullah Mian told Samakal, food security is being given top priority in fertilizer supply. With the current stocks, there will be no problem till December. Most of the arrears have already been paid. Import operations will return to normal soon.