Bangladesh is losing billions of dollars every year only from importing Urea fertilizer from foreign nations due to a faulty system that has been prevalent for decades.
According to Bangladesh Fertilizer Association (BFA) and USDA 2022, the annual demand of Bangladesh for chemical fertilizers is about 6 million metric tons, of which about 80 percent are imported. Bangladesh government imports four major chemical fertilizers Urea, Diammonium Phosphate (DAP), Triple Super Phosphate (TSP), and Muriate of Potash (MOP).
The Ukraine war has added new concerns for countries like Bangladesh in importing chemical fertilizers. Ukraine and Russia have been the key suppliers of fertilizer to Bangladesh. Bangladesh requires 0.75 million metric tons of Muriate of Potash (MOP) fertilizer every year. The country imports 40 percent or 0.30 metric tons of MOP fertilizer from Russia and 20 percent or 0.15 million metric tons from Canada. Besides MOP, TSP and DAP fertilizers are also imported from Russia. If the Russia-Ukraine war continues, it can create a MOP supply cut causing higher domestic prices of chemical fertilizer. Due to sanctions-related complications, Bangladesh is facing difficulty in importing chemical fertilizers either from Ukraine or Russia.
According to Bangladesh Fertilizer Association 2022, Bangladesh requires 2.65 million metric tons of Urea, 0.75 million metric tons of TSP, and 1.6 million metric tons of DAP fertilizer every year. The country only produces 1 million metric tons of Urea and only 0.1 million metric tons of TSP every year. The rest of the demands for Urea are met by importing from UAE, Saudi Arabia, Qatar and Iran and TSP from Morocco, and Tunisia.
Jamuna Fertilizer Factory, the only Granular Urea producer factory in the country and Chittagong Urea Fertilizer Limited (CUFL) stopped production due to gas shortage. The production capacities of those factories are 1,700 metric tons of Urea per day.
How Bangladesh loses money in importing fertilizer?
Surprisingly, for decades, import of fertilizer, including Urea is handled by Bangladesh Chemical Industries Corporation (BCIC) while this semi-government entity should not have been assigned to handle the import of fertilizer, as BCIC is supposed to only handle production. Most interestingly, the entire process of import of fertilizer by BCIC is controlled by two or three syndicates, who have been selling fertilizer – especially Urea at an exorbitant price.
For example, US urea spot price today is at a current level of US$511.14, down from US$535.82 last month and down from US$550.00 one year ago. But the price of urea in Ukraine, for example is much lesser. According to some sources, current price of urea in Ukraine ranges between US$210-250.
Surprisingly, traders have been selling urea to Bangladesh Chemical Industries Corporation (BCIC) within the price range of US$900 to US$1,400, and during the rule of Bangladesh Nationalist Party, a particular company enjoying blessings from Hawa Bhaban and Tarique Rahman was enjoying monopoly business at BCIC whereas it was selling urea at double or triple the rate of international price. Such notorious activities continued for years and is continuing even now – where traders have formed a deep-rooted syndicate with several rogue officials of BCIC and the concerned ministry.
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