Stockpiling by dealers pushes up fertiliser prices

Infographic: TBS

The latest hike in urea price has prompted dealers to stockpile other fertilisers, creating an artificial shortage in the market and triggering more suffering for farmers.

Anticipating that the government might also increase the prices of non-urea fertilisers, dealers across the country have started to hoard fertilisers, pushing the prices further up in the retail market.

Meanwhile, many farmers are not able to use fertilisers even after planting the Aman paddy.

Acknowledging the crisis, Chairman of Bangladesh Fertilizer Association (BFA) Kamrul Ashraf Khan Poton told The Business Standard, "A panic has spread among the dealers that after urea, the government might also increase the price of some other fertilisers. That is why they are not releasing products in the market, creating a shortage."

"The issue, however, will be over within a week as we have given instructions in this regard to the dealers," he added.

The agriculture minister in a press conference on Thursday said the government had decided to increase the price of fertiliser to reduce the excessive use of urea. Even so, the government is subsidising per kg of urea by Tk59.

The Business Standard's Dinajpur correspondent Bipul Sarker Sunny found that many farmers are not getting fertilisers in local markets. 

Farmers had to buy urea at the rate of Tk900-1050 per bag (50kg) even before the price hike when the government-set price was Tk800.

However, after the price hike, urea is selling at the fixed rate of Tk1,100 and the supply has also increased.

But, other fertilisers like DAP, MOP and TSP are selling at higher prices and the supply of these fertilisers is also low.

Farmers said fertilisers must be applied 10-15 days after planting Aman paddy seeds in the field. It is already time to apply fertilisers in some lands, and almost all croplands will be ready within a week or so.

Visiting different places of the district, it was seen that traders have increased the price of all fertilisers within a day of the price hike of urea.

MOP fertiliser is being sold at Tk25-26 per kg, while Tk15 is the government-fixed price. TSP fertiliser is being sold at Tk22-25 per kg, against the government-fixed price of Tk22 and DAP fertiliser is being sold at Tk16-18 per kg, against the government-fixed price of Tk16.

Janani Traders, a fertiliser seller in Dinajpur Sadar's Gopalganj market, requires 500 sacks of urea every Boro season, but the shop did not have any urea. The demand for MOP Fertiliser is 300 bags, but only one bag was available. DAP Fertiliser's demand is 200 bags, but only 4 bags were available at the shop.

The owner Rafiqul Islam's son Rubel Islam said, "Although I don't have fertiliser at present, I have asked the dealers to provide it soon. I don't think there will be a crisis."

Farmer Jasim Uddin went to a retail store for a bag of urea after planting paddy on three-bigha land. The shopkeeper told him to come back after a week.

Similar scenarios were reported in several districts including Naogaon, Bogura, Rangpur, and Rajshahi.

A fertiliser dealer in Rangpur Sadar, on condition of anonymity, told TBS, "We are also not getting fertiliser as per demand. Some dealers are hoarding products in the hope of a price increase."

A shortage of urea fertiliser was also seen in Rangpur. Farmers are not getting as per requirement. Although the agriculture office claimed that there is an ample stock of fertilisers.

Ruhul Amin, a farmer from Badarganj upazila, said, "I bought a 50kg bag of urea fertiliser for Tk1,500, while the government-fixed price is Tk1,100."

Reducing urea use won't harm production: Agri minister

Considering the increase in the price of urea fertiliser, farmers can reduce its use by 20%, said Agriculture Minister Mohammad Abdur Razzaque.

"This decrease in use will not hamper production in any way rather will increase the yield and reduce the farmer's expenses," the minister said during a press conference at the secretariat on Thursday.

Excessive use of urea can be very harmful, he said, adding that the Tk6 per kg increase in urea price will not have any effect on farmers if they reduce its use.

Considering the global price hike of urea fertiliser, the government raised the price to Tk22 per kg from Tk16 for farmers on 1 August.

"However, despite the increase of non-urea fertilisers (TSP, DAP, MOP) prices by four times in the global market the prices were not increased in the country. So, farmers can rely on these fertilisers as well," the minister said.

Stating that there is sufficient stock of all kinds of fertilisers in the country at present, the minister said, "We are closely monitoring the matter so that no one can create an artificial crisis anywhere in the country and stern action will be taken against such activities."

The current agriculture-friendly government under the leadership of Prime Minister Sheikh Hasina has reduced the price of fertilisers four times since 2009 and is delivering sufficient fertilisers at the doorsteps of farmers at very low prices, he said.

The minister said the government has 7.27 lakh tonnes of urea in reserve whereas the country needs 6.19 lakh tonnes between July and September.

The reserve of TSP is 3.09 lakh tonnes against 1.19 lakh tonnes demand between July and September, DAP reserve is 6.34 lakh tonnes against 2.25 lakh tonnes demand and MOP reserve is 2.10 lakh tonnes against 1.37 lakh tonnes demand

"The government imports urea at Tk81 and sells at Tk22. TSP import cost is Tk108 and the sale price is Tk22, MOP import cost is Tk106 and the sale price is Tk15 and the DAP import cost is Tk123 and the sale price is Tk16.

The government provided subsidies for fertilisers at Tk88,828 crore since 2009. In the fiscal year 2020-21, the government provided Tk7,716 crore subsidies in fertilisers.