Declining Global Fertilizer Prices to Benefit Government's Budget for Purchases

Bangladesh: The government has given the green light to the procurement of 230,000 tonnes of three fertilizer varieties from international markets at a reduced cost of up to Tk 16 per kg. On Wednesday, a cabinet committee approved six proposals for the purchase of these fertilizers. The industries ministry's proposals for procuring 90,000 tonnes of urea fertilizer received approval, while the agriculture ministry's two proposals for 100,000 tonnes of MOP fertilizer were also given the go-ahead.

Additionally, the agriculture ministry's proposal to procure 40,000 tonnes of DAP fertilizer was approved. Out of the 30,000 urea fertilizers being purchased, Bangladesh Chemical Industries Corporation will acquire them from Muntajat in Qatar, costing Tk 991.1 million, or Tk 33 per kg.

The government has approved a payment of Tk 996.5 million, equivalent to Tk 33.21 per kg, for an additional 30,000 tonnes of urea from Karnaphuli Fertilizer Company Limited. BCIC has also been authorized to obtain another 30,000 tonnes of urea from Sabik Agri-Nutrients of Saudi Arabia at Tk 952.5 million, or Tk 31.25 per kg. Recent agriculture ministry data indicates that the price of urea has decreased by Tk 15-16 per kg compared to the previous purchase, with the latest rate being Tk 48 per kg.

The government of Bangladesh is considering a proposal to purchase 100,000 tonnes of MOP fertilizers from the Canadian Commercial Corporation in two instalments at a cost of Tk 2.37 billion each, which amounts to Tk 47.54 per kilogram. This is a reduction of Tk 12.5 per kg compared to the price of the previous consignment.

Additionally, the government plans to buy 40,000 tonnes of DSP fertilizers from Morocco's OCP Group at Tk 2.39 billion, which is equivalent to Tk 59.83 per kg, for the Bangladesh Agricultural Development Corporation. This is a reduction from the previous price of Tk 70 per kg. Despite this, the retail price of fertilizers has been increased by Tk 5 per kg due to the ongoing global economic situation and the rising prices of fertilizers on the international market.

Considering this, the Ministry of Agriculture has determined that about 6.84 million tonnes of 11 different types of fertilizers, including urea and DAP, will be required for the upcoming 2023-24 fiscal year in Bangladesh. The country has spent approximately Tk 150 billion on the fertilizer subsidy for the current fiscal year.