Amidst unprecedented price escalation of chemical fertilizers, international trade sanctions have started impacting Bangladesh’s import of the key farm nutrients.
Speaking at a city event on Monday, Agriculture Minister Dr Muhammad Abdur Razzaque said the government got a price quotation for potash at $1200 a ton – which is fourfold higher than last year’s price of $300 - against an import tender Monday.
Due to US-slapped sanctions on Belarus’ state-owned potash producer, Belarus Potassium Corporation (otherwise known as Belaruskali), importers from Bangladesh are now facing trouble.
The managing director and CEO of City Bank, Mashrur Arefin, told the same event held at Krishibid Institution, Bangladesh (KIB) importers from Bangladesh are not being able to import fertilizer from Belarus due to sanctions-related payment difficulties.
Speaking to Dhaka Tribune on the sideline of the event, he mentioned the name of one of his bank’s clients (Noapara Group) that he said has been having trouble importing fertilizer.
Belaruskali is one of the largest producers of potash fertilizers in the world, accounting for 20% global supply.
Noapara Group Chairman Md Faizur Rahman Bokul could not be reached over the phone last night for comment.
The agriculture minister, the City Bank CEO along with two other government ministers, experts and academics were taking part in a discussion at KIB organized by a forum of agriculture journalists.
A prolonged Covid-19 pandemic period over the past two years compounded by the ongoing Russian invasion of Ukraine, the prices of chemical fertilizers witnessed at least a threefold increase in the international market.
Bangladesh government’s fertilizer subsidy has shot up to over Tk30,000 crore in the current fiscal from the last fiscal’s Tk7,200 crore.
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Concern over future food security
In an April 20 report, titled “How the War in Ukraine Threatens Bangladesh’s Food Security,” the International Food Policy Research Institute (IFPRI) said: “Russia and Belarus are major global fertilizer exporters, and the war, including export sanctions aimed at Russia, has disrupted these markets as well.”
Bangladesh imports 41% of its potash needs from Belarus and 34% from Russia.
Bangladesh agriculture, particularly rice production, relies heavily on the use of fertilizers. Average application rates are over 286 kg/hectare and Bangladesh imports over 1.2 million tons of fertilizer annually, including 31% of nitrogen needs, 57% of phosphate needs and 95% of potash needs.
Washington-based food policy thinktank IFPRI says: “Bangladesh will likely have to source these ingredients from other countries and pay higher prices. Resulting lower input use — particularly of nitrogen-based fertilizers—could reduce rice production, increasing demand on rice imports.”
“With a total demand of 5.8 million MT of fertilizers, and market disruptions proliferating, farmers now face huge uncertainties in getting fertilizers on time. Fertilizer shortages would have significant impacts in the planting of Aus rice season this spring, Aman in July, and Boro season rice later this fall,” notes IFPRI.
Food and Agriculture Organization (FAO) of the United Nations in a recent report titled, “Importance of Ukraine and the Russian Federation for global agricultural markets and the risks associated with the current conflict,” states that” “With prices of fertilizers and other energy-intensive products rising as a consequence of the conflict, overall input prices are expected to experience a considerable boost. The higher prices of these inputs will first translate into higher production costs and eventually into higher food prices. They could also lead to lower input use levels, depressing yields and outputs in the 2022/23 crop season, and giving further upside risk to the state of global food security in the coming years.”
FAO says: “In order to prevent or limit the conflict’s detrimental impacts on the food and agricultural sectors of Ukraine and the Russian Federation, every effort should be made to keep international trade in food and fertilizers open to meet domestic and global demand.
“Supply chains should be kept fully operational, including the protection of standing crops, livestock, food processing infrastructure, and all logistical systems.”