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Gasoline disaster has discovered a brand new sufferer after hitting the nation’s nationwide grid onerous. Now, manufacturing of urea fertiliser has begun to really feel the pinch, with one fertiliser manufacturing unit having been unable to function for nearly a month because of the gasoline provide crunch.
Specialists worry a meals disaster if the state of affairs continues or worsens and farmers don’t get well timed fertiliser provide.
Jamuna Fertilizer Firm Restricted (JCFL), a urea producer, has not been capable of function for a month, whereas officers involved consider the state of affairs will proceed for the subsequent three months.
In the meantime, the Chattogram Urea Fertilizer Restricted (CUFL) has been directed to proceed manufacturing by rationing.
Shahjalal Fertilizer Firm Ltd and the Ashuganj Fertilizer & Chemical Firm Restricted are additionally in danger.
In accordance with Petrobangla information, 316 million cubic metres per day of gasoline is required to maintain the factories’ manufacturing working. However these are solely getting 159 million cubic metres of gasoline, making it unimaginable to proceed operations of all of the factories.
Until final month, Petrobangla used to produce 3,100 million cubic ft of gasoline (mmcf) per day of which round 750mmcf to 800mmcf was LNG. Nevertheless, provide has now dropped to 2,800mmcf as the federal government started injecting much less liquefied pure gasoline (LNG) as a result of world worth volatility, piping in solely 490mmcf.
Officers of the JFCL mentioned a goal of 4.5 lakh tonnes of fertiliser manufacturing was set for the present fiscal yr, however a three-month closure signifies that this is probably not met.
The manufacturing unit, at full capability, may produce 1,700 tonnes of fertiliser per day.
It had shut on 22 June, having produced 1,275 tonnes per day earlier than that, because of the gasoline disaster.
Mohammad Sahidullah Khan, basic supervisor (operation) and head of the manufacturing unit’s technical division, informed The Enterprise Customary, “Because of gasoline scarcity, the manufacturing unit has stopped manufacturing for a couple of month. We’ve got knowledgeable the regulatory our bodies, written to them and held repeated conferences. However we have not discovered an answer but.”
In accordance with some senior JFCL officers, the Ministry of Business, Ministry of Agriculture and the Bangladesh Chemical Industries Company (BCIC) are attempting to get gasoline provide to the manufacturing unit.
Specialists say the federal government is already beneath strain because of the excessive import price of chemical fertilisers because the breakout of the Russia-Ukraine warfare, with prices hovering 3 times the conventional worth.
In accordance with the agriculture ministry, earlier than Covid-19 within the monetary yr 2020-21, Tk32 was spent to import one kg of urea fertiliser, whereas it’s costing Tk96 or extra this yr, forcing the federal government to present Tk82 in subsidies per kg.
In opposition to this backdrop, if native manufacturing of urea fertiliser is hampered, the strain on imports will rise. If the imports do not materialise, it is going to then influence the nation’s meals manufacturing.
Agricultural Economist Dr Md Jahangir Alam Khan informed TBS, “There’s now an vitality and meals disaster worldwide. Not one of the world provide programs is beneath a standard situation. Amid this, if we wish to produce extra meals, we should keep the availability of fertilsers. As a result of it’s instantly associated to meals manufacturing.
“If we had considered these points upfront, perhaps we may have deliberate to extend native manufacturing. However within the present state of affairs, closing the fertiliser manufacturing vegetation just isn’t logical. Rising native manufacturing ought to now be the primary goal,” he mentioned.
Within the Chattogram’s Anwara, Chittagong Urea Fertilizer Restricted (CUFL) sources mentioned the corporate has additionally been requested to proceed manufacturing however via rationing.
The CUFL wants 41 mmcf of gasoline per day as gasoline is likely one of the principal uncooked supplies for producing urea and ammonia.
Engineer Md Akhtaruzzaman, managing director of CUFL, informed TBS, “There is no such thing as a influence of a gasoline disaster to this point on our manufacturing. Nevertheless, the federal government has requested us to run the manufacturing unit on a rationing foundation, however we’re but to begin.
“Our current manufacturing is 1,150 to 1200 tonnes. If we begin rationing it is going to come right down to round 1,000 tonnes per day,” he mentioned.
In the meantime, Omar Farooq, MD of Shahjalal Fertilizer Firm Ltd, mentioned, “We’ve got produced 4.23 lakh tonnes of fertilisers within the final monetary yr. This yr there’s a greater manufacturing goal. Thus far, we’ve got not confronted any disaster.”
Official figures present that the demand for chemical fertilisers in FY 2022-23 is round 67 lakh tonnes. Out of this, urea demand is 26 lakh tonnes, of which the 4 factories within the nation are producing 10.5 lakh tonnes. The remaining 16 lakh, if no more, should be imported.
The import could be expensive as fertiliser producers worldwide are dealing with the same gasoline disaster and climbing the costs.
Some European fertiliser makers, which relied on low cost Russian gasoline provide, had been pressured to close manufacturing for need of gasoline.
Scarcity of gasoline provide can also be taking its toll on fertiliser manufacturing in India and threatening kharip crop there. India’s agriculture subsidy has surged and making certain availability of fertilisers finally yr’s costs could possibly be an enormous fear for the federal government, media stories mentioned.
Worldwide Meals Coverage Analysis Institute aired comparable worries for international locations together with Bangladesh.
Fertiliser worth hike and issues about availability will solid a shadow on future harvests and meals safety for an extended interval in low- and middle-income international locations, it mentioned in a blogpost in April. In international locations like Bangladesh, the place a excessive fertiliser subsidy regime will relieve farmers of worth shock, it is going to put great fiscal strain on the finances, it warned.
The federal government has been offering fertiliser subsidies to the tune of Tk8-9 thousand crores, whereas the Ministry of Agriculture reported spending Tk28 thousand crores on imports final yr.
As fertiliser costs rose sky excessive, Bangladesh needed to spend greater than $4 billion, up by 223% from a yr in the past, to import fertiliser within the 11 months of the final fiscal yr until Might.
A momentum upended
The federal government’s drive to extend manufacturing amid a worldwide meals grain provide disaster is now threatened by a fertiliser disaster within the offing.
Fertiliser imports from Russia and Belarus, two main sourcing international locations, have stopped.
There are import alternatives from numerous international locations together with Canada, Saudi Arabia, China, Morocco, Qatar, United Arab Emirates, Tunisia, however the worth enhance will even take a toll on already strained overseas reserves.
In the meantime, the Ministry of Business has agreements with Saudi Arabia, Qatar and Dubai from the place fertilisers are frequently imported.
Kazi Mohammad Saiful Islam, director (joint secretary, business) of BCIC informed TBS, “Now three factories are in manufacturing. One has shut down as a result of gasoline scarcity. Nevertheless, we’re discussing methods to maintain the factories working. We’re speaking with the international locations from which we import urea, so we will import shortly if vital.”
Balai Krishna Hazra, further secretary (Fertilizer Administration and Supplies Unit) of the Ministry of Agriculture, informed TBS, “Our demand for urea is 26 lakh metric tonnes, and on the similar time, we’ve got to maintain a reserve of 8 lakh tonnes annually. Altogether, we’d like 34 lakh tonnes. We’ve got no scarcity of urea until December, which means there can be no disaster within the Aman season.”
He, nevertheless, mentioned if the present state of affairs prevailed then there could be a disaster. “However they [the factories] have given their phrase that they are going to keep manufacturing in any approach.”
Seven-and-a-half lakh tonnes of urea is required throughout the Aman season, which can be adopted by Boro, the largest crop which requires 60% of fertiliser provides.
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