https://arab.news/8me44
- Global energy price hike, gas crisis forces fertilizer companies to cut production
- Country has imported over 1.1m tons from Saudi Arabia, UAE and Qatar this year
DHAKA: Bangladesh is relying more on Middle Eastern countries to meet its demand for urea, a state agency official said, as an ongoing gas crisis tightens local supply and raises concerns about food security in the South Asian nation.
With a population of about 166 million and an agriculture sector making up more than 11 percent of its gross domestic product last year, Bangladesh needs around 2.6 million tons of urea, a fertilizer widely used in food crops.
As local gas fields struggled to meet rising demand amid a global hike in energy prices sparked by Moscow’s invasion of Ukraine, fertilizer companies in Bangladesh were either shut down or forced to cut their production, leading to a dwindling supply of urea. To resolve the supply gap, the Bangladeshi government has been importing more fertilizer from countries in the Middle East.
“We can say our fertilizer imports from Middle Eastern countries have increased around 15 percent due to the gas supply crisis in the local market,” Kazi Mohammad Saiful Islam, a director at the state-run Bangladesh Chemical Industries Corp., told Arab News in an exclusive interview.
He said more than 1.1 million tons of urea had been imported from three countries — Saudi Arabia, the UAE and Qatar — and there were plans to increase that quantity later this year.
“Considering the present global situation, we have already confirmed the respective countries to buy this additional amount,” Islam said.
He added that Bangladesh normally imported about a quarter of the urea it needs, but since the start of the Ukraine invasion in February, the price per ton had more than doubled.
“Due to the ongoing Ukraine-Russia conflict, the global fertilizer market has turned very volatile,” agricultural economist and researcher Dr. Jahangir Alam told Arab News.
Due to its dwindling reserves of foreign exchange, he said Bangladesh should consider setting up a long-term contract with its foreign suppliers to buy urea “at a cheaper rate” and “pursue the urea purchase on a credit basis.”
Dhaka should also look to boost local fertilizer production, said Alam, who is a former vice chancellor of the University of Global Village in southern Bangladesh.
“Producing urea locally is much cheaper for us. So, the authorities should try to increase the production ability in the country.”