Is Bangladesh settling for a higher price?

In haste to procure chemical fertilizers on time, is the government settling for a higher price in importing di-ammonium phosphate (DAP)?
 
In December, Bangladesh struck a deal to import 1.2 million tons of di-ammonium phosphate (DAP) from Saudi Arabia at USD 743 per ton.
 
Under the agreement, Saudi company Ma’aden would supply 0.6 million tons each this year and in the next year to Bangladesh Agricultural Development Corporation (BADC).
 
Interestingly, the current import price of DAP is much lower – hovering at around USD 600 – as Bangladesh moved to import the most widely used phosphorus fertilizer from China and Morocco in the 4th quarter of 2024.
 
On December 26, a meeting of the Advisers’ Council Committee on Government Purchase (ACCGP) gave the state-run BADC a go ahead to procure 40,000 metric tons of DAP from Morocco at a cost of USD 584.50 per ton.
 
In one of the purchase body’s previous meetings just two months ago, the government also approved two other equal consignments (40,000 tons) of DAP imports –  one from a Chinese company at USD 613.25 per ton and another from Saudi company Ma’aden at USD 606 a ton.
 
Now on December 15, BADC signed an agreement with the same Saudi company for importing six lakh tons of DAP in each of the years 2025 and 2026 at a price as high as USD 743 per ton.
  
According to a recent report of the Food and Agriculture Organization of the United Nations, in September 2024, one ton of DAP sold for USD 577 compared to USD 1,132 in April 2022.
 
The most recent DAP sale, reported from Ma’aden in Saudi Arabia, was at USD 643-644 per ton. Earlier, in September last year, India imported DAP at USD 632 per ton.
 
A BADC release issued nearly two weeks after the deal was signed in Riyadh, Saudi Arabia, in presence of agriculture secretary, has assured that as a result of the DAP import agreement there would not be any crises of the fertilizer and the farmers would get the fertilizer on time.
 
Bangladesh earlier signed memorandum of understanding (MoU) twice with the Saudi authorities and companies in 2018 and 2023 declaring that Bangladesh would invest in constructing a new DAP factory in Saudi Arabia to ensure cheaper supply of the fertilizer in the long run. But nothing concrete comes out so far from the two MoUs.
 
Bangladeshi farmers require over 1.6 million tons of DAP a year and over 90 percent of it has to be imported.      
 
DAP is composed of two common fertilizer constituents, both nitrogen and phosphorus and its relatively high nutrient content and excellent physical properties make it a popular choice in farming.
 
Futures contracts for DAP are financial instruments that allow producers, large consumers, and speculators, to offset or assume the risk of a price change of holding a quantity of di-ammonium over time.