Urea, MoP prices upped by more than 200pc
Shakhawat Hossain | Wednesday, 11 June 2008
The government Tuesday enhanced the selling price of urea and Muriate of Potash (MOP) by more than 200 per cent to reduce pressure on subsidy regime, an industry ministry official said.
The selling price of per tonne of urea fertiliser has been increased to Tk 10,000 from that of existing Tk 4,800. The new price for MOP is Tk 50,000 per tonne as against the previous price of Tk 19,500 per tonne.
The upward price adjustment of fertilisers came for the first time since 1996 and just a day after the announcement of national budget for the fiscal 2008-09.
An official of the ministry of industry said upward price adjustment of fertilisers will lessen the pressure on the government on account of subsidy.
In the outgoing fiscal, the estimated subsidy on fertiliser will be more than Tk 40 billion from the originally projected Tk 22 billion due to the growing mismatch between selling and procurement prices of the same.
Fertiliser subsidy worth Tk 36.68 billion has been earmarked in the budget for the new fiscal, said the official.
Following upward adjustment, price of per kg urea will be around Tk 10 from the previous price of Tk 6.50 on an average. The new price of per kg MoP will be around Tk 50.
Special assistant to the chief adviser Mahbub Jamil, who is in charge of industry ministry, will announce the upward price adjustment of the fertiliser this morning.
Agricultural activist Shykh Seraj said price hike will increase the production cost of farmers across the country.
"It will adversely affect the marginal farmers," he said, adding that farmers would be inclined more to use bio-fertiliser instead of chemical ones.
Bangladesh Fertiliser Association chairman Kafil Uddin said the upward price adjustment was a necessity due to price hike of urea in the international market in just one year.
He said price hike of fertiliser in the local market would not dampen the spirit of farmers as they are getting higher price for their produce.
The country's urea and MoP consumption has increased substantially since 2004 following wider cultivation of high yielding varieties and hybrid rice.
The government has planned to import around 1.1 million tonnes of urea while the rest would be produced locally to meet the projected demand of 2.85 million in the new fiscal.
The country consumes around 0.4 million tonne MoP but it locally produces around 50,000 tonnes annually.
Finance and planning adviser Mirza Azizul said Tuesday the new budget and allocation for the sectors was made on the assumption of upward adjustment in price of fertiliser, fuel oils and food grains.
In the outgoing fiscal, the industries ministry proposed enhancement of fertiliser prices.
But the proposal could not be executed due to resistance by the agricultural ministry whose recommendation is essential before any price adjustment is made.
The agriculture ministry had argued that price enhancement would have created a negative impact on last boro crop.
The selling price of per tonne of urea fertiliser has been increased to Tk 10,000 from that of existing Tk 4,800. The new price for MOP is Tk 50,000 per tonne as against the previous price of Tk 19,500 per tonne.
The upward price adjustment of fertilisers came for the first time since 1996 and just a day after the announcement of national budget for the fiscal 2008-09.
An official of the ministry of industry said upward price adjustment of fertilisers will lessen the pressure on the government on account of subsidy.
In the outgoing fiscal, the estimated subsidy on fertiliser will be more than Tk 40 billion from the originally projected Tk 22 billion due to the growing mismatch between selling and procurement prices of the same.
Fertiliser subsidy worth Tk 36.68 billion has been earmarked in the budget for the new fiscal, said the official.
Following upward adjustment, price of per kg urea will be around Tk 10 from the previous price of Tk 6.50 on an average. The new price of per kg MoP will be around Tk 50.
Special assistant to the chief adviser Mahbub Jamil, who is in charge of industry ministry, will announce the upward price adjustment of the fertiliser this morning.
Agricultural activist Shykh Seraj said price hike will increase the production cost of farmers across the country.
"It will adversely affect the marginal farmers," he said, adding that farmers would be inclined more to use bio-fertiliser instead of chemical ones.
Bangladesh Fertiliser Association chairman Kafil Uddin said the upward price adjustment was a necessity due to price hike of urea in the international market in just one year.
He said price hike of fertiliser in the local market would not dampen the spirit of farmers as they are getting higher price for their produce.
The country's urea and MoP consumption has increased substantially since 2004 following wider cultivation of high yielding varieties and hybrid rice.
The government has planned to import around 1.1 million tonnes of urea while the rest would be produced locally to meet the projected demand of 2.85 million in the new fiscal.
The country consumes around 0.4 million tonne MoP but it locally produces around 50,000 tonnes annually.
Finance and planning adviser Mirza Azizul said Tuesday the new budget and allocation for the sectors was made on the assumption of upward adjustment in price of fertiliser, fuel oils and food grains.
In the outgoing fiscal, the industries ministry proposed enhancement of fertiliser prices.
But the proposal could not be executed due to resistance by the agricultural ministry whose recommendation is essential before any price adjustment is made.
The agriculture ministry had argued that price enhancement would have created a negative impact on last boro crop.