Govt raises fertiliser prices
FE Report | Thursday, 12 June 2008
The government has increased the prices of urea fertiliser by more than 100 per cent to help reduce its ever-growing expenditure on account of marketing the agricultural input at subsidised rates.
Under the revision, the mill-gate price of urea has been refixed at Tk 10,000 per tonne or Tk 10 per kg while the new rate will be at Tk 10,700 per tonne or Tk 10.70 per kg at the level of buffer stocks.
The revised prices came into effect Wednesday.
Earlier, the official prices of urea were Tk 4800 per tonne or Tk 4.80 per kg and Tk 5,300 per tonne or Tk 5.30 per kg at the mill-gate and the buffer stock levels respectively.
Besides, like the previous years, the government will continue to provide subsidy at the rate of 15 per cent on the sale of other imported non-urea fertilisers - TSP, DAP, MOP - at the farmers levels.
Announcing the revised urea prices at a press conference, Special Assistance to the Chief Adviser Mahbub Jamil said, "Such upward adjustment will help the state-run fertiliser factories minimise their financial losses to some extent."
Industries Secretary Md. Nurul Amin, Agriculture Secretary M Abdul Aziz, Principal Information Officer Iftekhar Hossain were also present at the press conference, held at the Secretariat.
Justifying the upward price adjustments, Mr. Jamil said not only the state-run urea fertiliser factories are incurring substantial financial loss, but also the volume of subsidy on the same has been rising unabatedly.
"The official rates of urea remained unchanged for the last 11 years despite that fact that price of natural gas, electricity tariff, salary and wage, and other expenditures had gone up scientifically during the period," he said.
Fertiliser units under the Bangladesh Chemical Industries Corporation (BCIC) sustained financial losses to the tune of Tk 10.10 billion while the government had to spend more than Tk 60.52 billion as subsidy for over a decade, he mentioned.
The government's payment of subsidy on urea fertiliser will be Tk 54.05 billion in the fiscal year 2008-09 alone, the special assistant, who is also in the charge of Ministry of Industries, noted.
Due to their acute financial crisis, the outstanding gas bills of the BCIC-run fertiliser units have already reached Tk 2.11 billion, he said, adding that the fertiliser units are being operated with lot of risks as their overhauling and repairs have been long overdue.
Citing the surging prices of urea in the global market, Mr. Jamil said the average cost for importing a tonne of urea has now increased to Tk 58,000 from Tk 8,086 in 1997.
"Despite the latest upward adjustments, the government will have to bear Tk 47,300 per tonne or Tk 47.30 per kg as subsidy on imported urea," he said.
Responding to a question, the special assistant said the upward adjustment of urea prices would not create any major impact on cost of production at the growers' level.
Replying to another question, Mr. Jamil said the government has already taken steps to set up two fertiliser factories - one in north-Bengal region and another in Sylhet - to reduce the country's growing dependency on imported urea.
Under the revision, the mill-gate price of urea has been refixed at Tk 10,000 per tonne or Tk 10 per kg while the new rate will be at Tk 10,700 per tonne or Tk 10.70 per kg at the level of buffer stocks.
The revised prices came into effect Wednesday.
Earlier, the official prices of urea were Tk 4800 per tonne or Tk 4.80 per kg and Tk 5,300 per tonne or Tk 5.30 per kg at the mill-gate and the buffer stock levels respectively.
Besides, like the previous years, the government will continue to provide subsidy at the rate of 15 per cent on the sale of other imported non-urea fertilisers - TSP, DAP, MOP - at the farmers levels.
Announcing the revised urea prices at a press conference, Special Assistance to the Chief Adviser Mahbub Jamil said, "Such upward adjustment will help the state-run fertiliser factories minimise their financial losses to some extent."
Industries Secretary Md. Nurul Amin, Agriculture Secretary M Abdul Aziz, Principal Information Officer Iftekhar Hossain were also present at the press conference, held at the Secretariat.
Justifying the upward price adjustments, Mr. Jamil said not only the state-run urea fertiliser factories are incurring substantial financial loss, but also the volume of subsidy on the same has been rising unabatedly.
"The official rates of urea remained unchanged for the last 11 years despite that fact that price of natural gas, electricity tariff, salary and wage, and other expenditures had gone up scientifically during the period," he said.
Fertiliser units under the Bangladesh Chemical Industries Corporation (BCIC) sustained financial losses to the tune of Tk 10.10 billion while the government had to spend more than Tk 60.52 billion as subsidy for over a decade, he mentioned.
The government's payment of subsidy on urea fertiliser will be Tk 54.05 billion in the fiscal year 2008-09 alone, the special assistant, who is also in the charge of Ministry of Industries, noted.
Due to their acute financial crisis, the outstanding gas bills of the BCIC-run fertiliser units have already reached Tk 2.11 billion, he said, adding that the fertiliser units are being operated with lot of risks as their overhauling and repairs have been long overdue.
Citing the surging prices of urea in the global market, Mr. Jamil said the average cost for importing a tonne of urea has now increased to Tk 58,000 from Tk 8,086 in 1997.
"Despite the latest upward adjustments, the government will have to bear Tk 47,300 per tonne or Tk 47.30 per kg as subsidy on imported urea," he said.
Responding to a question, the special assistant said the upward adjustment of urea prices would not create any major impact on cost of production at the growers' level.
Replying to another question, Mr. Jamil said the government has already taken steps to set up two fertiliser factories - one in north-Bengal region and another in Sylhet - to reduce the country's growing dependency on imported urea.