State-owned fertiliser factories shut down, price hikes to offset import costs push agriculture into crisis and disrupt crop production

❐ Staff Reporter

Although the combined production capacity of the country’s seven state-owned fertilizer factories is more than 3.7 million tons per year, due to the gas crisis, it has dropped to just 1.1 million tons in the current fiscal year—that is, only 30 percent of capacity.

At the same time, the Ministry of Agriculture announced that the price of fertilizer per kilogram has been increased in line with global market prices and import costs. Due to this pressure from both sides, the country’s farmers are now going through the most difficult time in the middle of the Aman season.

More than 85 percent of the country’s total fertilizer demand now has to be met through imports. Import dependence has increased further as state-owned factories are unable to produce even one-third of their capacity due to lack of gas supply.

As a result, even the slightest instability in the international market directly affects the domestic market.

The World Bank has warned that fertilizer prices in the international market have increased by 12 percent in the first quarter of this year due to the conflict in the Middle East and uncertainty in the Strait of Hormuz, and that they could increase by up to 30 percent for the full year.

In this situation, to ensure supply, Bangladesh Chemical Industries Corporation (BCIC) is canceling several international tenders and trying to import fertilizer from alternative sources including China, Egypt, and Russia.

In this reality, the Ministry of Agriculture said that the price per kilogram in the domestic market has been increased to adjust for rising prices in the global market and import costs, keep imports at a reasonable level, and ensure optimal use of fertilizer.

Although the government claims that the stock is sufficient, the ground reality tells a different story. Farmers in various districts including Kurigram and Lalmonirhat have complained that they are not getting the fertilizer they need at dealer points, and are having to pay an additional 300 to 700 taka per bag in the open market.

In some places, angry farmers have blocked roads and even taken away fertilizer from warehouses.

The agriculture minister himself called the chaos a “planned conspiracy,” although he did not specify who was behind it.

Economist M. Asaduzzaman believes that the government is having to reduce subsidies and increase prices in various sectors, including fuel and fertilizer, to meet the needs of global market prices and meet the conditions of international financial institutions.

However, he warned that this is increasing the cost of production of agricultural products, and it is important to account for these additional costs and give farmers the opportunity to manage them.

Agricultural experts believe that about three-quarters of the country’s total fertilizer use is spent on rice cultivation, and with high-yielding and hybrid varieties now spreading not only to Boro but also to Aman, fertilizer has now become a bigger constraint than water.

If supply disruptions and price increases continue, it could disrupt production in the current Aman season as well as impact the upcoming Boro and winter vegetable seasons, posing a long-term risk to the country’s food security.