BCIC struggling with fertilizer supply

FT ONLINE

The state-run Bangladesh Chemical Industries Corporation (BCIC) is struggling to ensure adequate supply of fertiliser in the upcoming Boro season, officials said.

To avert any unpleasant situation during the production season of the major crop, the corporation postponed overhaul of some age-old urea manufacturing units.

The overhauling of the factories will require production shutdown for three to nine months considering the state of the factories that lost economic life many years ago, they said.

Not only that, the country's largest corporation further accelerated the process of importing a substantial quantity of fertiliser within mid-November to avoid any form of crisis.

The decision has been influenced by the upcoming general elections, a section of the officials added.

As part of the process, a team will fly for Dubai of the United Arab Emirates (UAE) for signing a contract for importing 0.2 million tonnes.

The factories remain closed most of the time of a year due to unavailability of natural gas, a basic raw material of fertiliser. Such a state of the two state-owned enterprises also contributed to the losses the corporation incurs.

The ministry of agriculture (MoA) set a demand for 2.55 million tonnes of fertiliser during the fiscal year (FY) of 2018-2019 and instructed the agency to keep buffer stock of additional 0.8 million tonnes to meet emergency needs.

According to the demand projection, some 1.6 million tonnes of fertiliser are estimated to be imported while 1.0 million tonnes to be produced domestically.

Around 0.62 million tonnes were used in the July-September season while another 0.38 million tonnes will be required for the October-November period.

The country needs 0.8 million tonnes during the irrigation season, which will start from early December and continue until March when the demand for fertiliser peaks.

According to the BCIC, it has a stock of 0.54 million tonnes of inorganic fertiliser to meet any exigency.

Since getting natural gas from later half of September, the average daily production of Chittagong Urea Fertiliser Factory (CUFL) was recorded at 1,300 tonnes.

Production at Jamuna Fertiliser Company Ltd (JFCL), Shahjalal Fertiliser Company Ltd (SFCL) and Palash Fertiliser Factory also picked up.

Talking about the issue, BCIC director (commercial) Md. Haiul Quaium said all the state-owned urea fertiliser factories have remained shut since April last year due to the supply shortage of gas.

After push from the corporation, the authorities resumed supply of natural gas from late September this year, he said.

"We're now getting gas. If we get uninterrupted supply of gas in the coming months, we will be able to meet a portion of the demand and remaining part will be met through import," he said.

He said they had planned to overhaul the factories, which was supposed to start from September. "We postponed the activities not to disrupt production in such a critical time. We will do it after the peak season," he added.

Seeking anonymity, a BCIC official said the country will have deficit in the fertiliser supply in the coming Boro season as all the factories were closed since April last year.

Citing the annual target, he said local factories are supposed to supply some 1.0 million tonnes of fertiliser, which becomes a difficult task now.

"Finally, we are getting gas from last month as the fear about shortfall deepens ahead of the 11th parliamentary election. The government doesn't want to create that kind of situation," he added.

When contacted, industries secretary Md. Abdul Halim ruled out the possibility of fertiliser shortage in the upcoming peak cropping season, saying the government is giving utmost priority over the matter.

Mr Halim noted a five-member team leaves for Dubai today (Saturday) for signing a contract of importing 0.2 million tonnes.

He said the tender process of procuring another 0.5 million tonnes is at the final stage.

"There is nothing to be worried. We made all the preparations for ensuring enough availability of the agro input," he said.

Bangladesh imports fertiliser mostly from the UAE, Qatar and Kingdom of Saudi Arabia. More than 0.2 million tonnes will be procured from each of these countries.