Import cost of urea surges on drastic fall in production

Badrul Ahsan | Published: April 16, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

The import cost of urea fertiliser continues to surge over the years following growing dependence on external sources, caused by a drastic fall in domestic production.
Officials at the Bangladesh Chemical Industries Corporation (BCIC) said the situation is gradually worsening mainly because of gas rationing.
The import volume of fertiliser increased nearly 35 per cent last year (2014) despite having sufficient capacity to produce nearly 90 per cent of the required volume locally, data showed.
Gas rationing was started in the urea plants since 2006-07 fiscal year but the situation started turning worse from fiscal year 2009-10 when three urea plants were closed for about 280 days.
In 2014, six urea factories under the BCIC were closed for a period of around 897 days.
Prior to the gas rationing, six urea factories used to produce around 1.9 million tonnes which came down to only 0.84 million tonnes last year against national demand of 2.6 million tonnes annually.
According to BCIC data, the government imported around 1.8 million tonnes of urea fertiliser in 2014 which was 1.3 million tonnes in 2013 and 1.2 million tonnes in 2012.
The increased volume of urea import also cost the country Tk4.88 billion during the period.
The BCIC imported urea fertiliser worth Tk 58.36 billion in 2014 against Tk53.48 billion in the corresponding period.
However, managing director of the Ashuganj Fertiliser and Chemical Company Limited (AFCCL), Engr. Nurul Kabir said machinery are getting spoiled for non-use for a long time.
"The machinery of the urea factories are highly sophisticated and prone to decay due to lack of operation," he added.
"We have urged the authorities to save the urea factories by keeping those operational for at least six month a year. Otherwise the machinery will be inoperative shortly," he said.
When contacted, director, production and research of the BCIC Altaf Uddin Sheikh told the FE that he has been in constant contact with the high-ups of the government for sufficient gas supply in the factories.
At present, three urea factories out of six are closed for long due to suspension of gas.
"It is a government policy. The government is providing gas to other sectors on an urgent basis through rationing of gas in the fertiliser factories," Industries Minister Amir Hossain Amu told the FE.
The minister, however, also said the ministry is very much aware of the probable effects of gas rationing on machinery of the fertiliser factories.
"We will not let the machinery become spoiled. We will do the needful so that these can be kept well," he added.
However, a high official of the corporation, preferring anonymity, said production might fall further this year (2015) in the wake of low gas pressure and frequent shutdown of the factories due to gas supply suspension.
Currently, the Chittagong Urea Fertiliser Factory (CUFL), the AFCCL and the Natural Gas Factory (NGFF) Limited are closed to meet gas requirement for power generation and other important industrial sectors.
Sources at the BCIC said the government might close down the urea factory at Polash at Narsingdi shortly.
Â Â Â badrulahsan71@gmail.com