Fertiliser subsidy to be more than double this year

Bangladesh will require an allocation of Tk 18,000 crore as subsidy on fertilisers for the current fiscal year, more than double than it spent last year.

The government has to spend this additional money to shield farmers from rising prices of diammonium phosphate (DAP) and urea in global markets, according to a high-level meeting chaired by Principal Secretary to the Prime Minister Dr Ahmad Kaikaus.

The meeting that was held on October 12 discussed the fertilisers and irrigation issues so that farmers get the vital inputs and can sow crops on time.

“Prices of fertilisers have been increasing abnormally in the international markets. So, the fertiliser subsidy may go up to Tk 18,000 crore this fiscal year,” Md Mesbahul Islam, senior secretary of the agriculture ministry, told the meeting.

Bangladesh spent around Tk 7,000 crore as subsidy on fertilisers in fiscal year 2020-21. But this year the amount will be more than double as prices of fertilisers rose unusually in the global markets.

Of the total fertiliser used by Bangladesh nearly 50 percent is urea, which now costs over $419 per tonne, up from $331 in May this year. DAP is the second most used fertiliser after urea in the country and its price rose $670 a tonne, up over 50 percent from a year ago. MOP’s price rose from $280 a tonne to $445 in the past three months.

The senior secretary of the agriculture ministry also informed the meeting about the demand for fertilisers this year and its present stocks.

Islam said this year Bangladesh needs 26 lakh tonnes of urea, 7.50 lakh tonnes TSP, 16.50 tonnes DAP and 7.50 lakh tonnes MOP. Of which, factories run by state-owned BCIC will be able to produce around 10 lakh tonnes and the remaining nearly 50 lakh tonnes have to be imported.

Presently, BCIC has 6.81 lakh tonnes of urea in stock, down from 8.27 lakh tonnes a year ago, he said.

Secretaries of the related ministries, such as industries, energy and chairman of BCIC attended the meeting and gave their inputs.

Energy secretary said fertiliser factories will get uninterrupted gas supply in the winter season so that they can produce the inputs.