To be clear an uninterrupted provide of fertiliser for the continuing Aman season and the upcoming Rabi gash season, $1.52 billion in fertiliser imports shall be required by March, in accordance to the agriculture and industries ministries.
The two ministries fill additionally urgently requested $179 million from the finance ministry to certain outstanding bills for previous fertiliser imports.
At an inter-ministerial assembly on 5 September, officials from the agriculture and industries ministries said international suppliers are refusing to continue shipments until pending funds are settled.
The assembly, chaired by Finance Secretary Md Khairuzzaman Mozumder, revealed that the continuing dollar shortage is hindering banks from opening letters of credit rating (LCs) for fertiliser imports.
The difficulty has been extra sophisticated by the dearth of LC confirmations from international banks, which is additionally impacting private-sector importers, as mighty in the assembly minutes.
In step with these challenges, the agriculture ministry no longer too prolonged prior to now despatched a letter to the finance ministry, highlighting a attainable fertiliser provide crisis beginning save in October.
The finance ministry then suggested the central monetary institution to be clear the provision of bucks for fertiliser imports by offering liquidity strengthen or identical measures to settle LC liabilities.
Besides, the central monetary institution has said this can decrease LC margins to extra manageable ranges for banks corresponding to Islami Financial institution and others.
In a summary despatched to Finance Adviser Salehuddin Ahmed final week, the finance division said, “The Bangladesh Agricultural Construction Corporation (BADC) for the time being owes $80 million in import bills and transport charges for DAP and MOP fertilisers from Saudi Arabia, Morocco, China, and Canada.”
“Delays in paying bills fill led international exporters to extinguish scheduled shipments. In consequence, round six lakh tonnes of fertiliser would possibly per chance well no longer be imported in the final three months,” it added.
The BADC manages the provision of non-urea fertilisers, while the Bangladesh Chemical Industries Corporation (BCIC) oversees urea fertiliser distribution.
In step with the two corporations, Bangladesh’s urea fertiliser question for the present fiscal One year is 27 lakh tonnes, while the present stock stands at 5.70 lakh tonnes. For non-urea fertilisers (TSP, DAP, MOP), the question is 32 lakh tonnes, with a present stock of 11.23 lakh tonnes.
Buck shortage hits fertiliser provide
The crisis in fertiliser imports started when the previous executive halted the provision of bucks from reserves. For the rationale that period in-between executive took administrative center, Finance Adviser Salehuddin Ahmed has directed the connected authorities to resolve the scenario.
BADC Chairman Abdullah Sazzad at the assembly said that loads of international suppliers are refusing to offer fertilisers because of outstanding funds.
“The dollar shortage has additionally led to concerns with LC opening in the non-public sector, with Sonali Financial institution suspending LC openings and Islami Financial institution requiring a 100% margin,” he added.
He mentioned that even though Janata Financial institution and Bangladesh Krishi Financial institution fill taken steps to begin LCs, they fill got been unable to secure the obligatory extra confirmations from correspondent banks.
Nurun Nahar Chowdhury, extra secretary of the Ministry of Agriculture, said the Financial Establishments Division had beforehand held meetings with all banks to address the dollar shortage for fertiliser imports.
“Even even though the full banks had assured of offering the obligatory dollars in that assembly, none fill followed thru on their commitments,” Nurun Nahar Chowdhury said.
In step with the BADC, it for the time being has $117 million outstanding for previous fertiliser imports and a further $700 million shall be obligatory to duvet imports until March.
BCIC Director Mohammad Shaheen Kamal said the organisation has outstanding bills of $62 million for urea fertiliser imports and $43 million for international loans connected to the Ghorashal-Polash Urea Fertilizer Factory.
A extra $672 million is obligatory for urea imports until March, along with $150 million for raw materials to earn TSP and DAP fertilisers.
Bangladesh Financial institution Extra Director Kazi Shaibal Siddiqui mentioned that the central monetary institution has imposed a 100% margin for LCs opened with Islami Financial institution.
Alternatively, given the recent enchancment in the dollar difficulty, Islami Financial institution would possibly per chance well ask the central monetary institution to relax the margin necessities.
He additionally urged that importers shouldn’t ever rely fully on Sonali Financial institution but fill in mind opening LCs with loads of public and private banks with better dollar run with the run.
