Local supply crunch forces Bangladesh hike urea imports from Middle East by 15% 

An ongoing gas supply crunch and concerns over food security have forced Bangladesh to rely more on Middle Eastern countries to meet its demand for urea fertiliser, reports Arab News.

With a population of about 166 million and an agriculture sector making up more than 11% of the gross domestic product last year, Bangladesh needs around 2.6 million tonne of urea.

Bangladeshi fertiliser companies were either shut down or forced to cut production as local gas fields struggled to meet rising demand amid a global hike in energy prices sparked by the Russia-Ukraine War.

This led to a dwindling supply of urea and to resolve the supply gap, the Bangladeshi government has been importing more fertiliser from countries in the Middle East.

"We can say our fertiliser imports from Middle Eastern countries have increased around 15% due to the gas supply crisis in the local market," Arab News quoted Bangladesh Chemical Industries Corporation (BCIP) Director Kazi Mohammad Saiful Islam as saying.

He said more than 1.1 million tonne of urea had been imported from three countries – Saudi Arabia, the UAE and Qatar – and there were plans to increase that quantity later this year.

"Considering the present global situation, we have already confirmed the respective countries to buy this additional amount," Islam said.

He added that Bangladesh normally imported about a quarter of the urea it needs, but since the start of the Ukraine invasion in February, the price per tonne had more than doubled.

"Due to the ongoing Ukraine-Russia conflict, the global fertiliser market has turned very volatile," agricultural economist and researcher Dr Jahangir Alam told Arab News.

Due to its dwindling reserves of foreign exchange, he said Bangladesh should consider setting up a long-term contract with its foreign suppliers to buy urea "at a cheaper rate" and "pursue the urea purchase on a credit basis."

Dhaka should also look to boost local fertiliser production, said Alam, who is a former vice-chancellor of the University of Global Village in southern Bangladesh.

"Producing urea locally is much cheaper for us. So, the authorities should try to increase the production ability in the country," he furthered while speaking with Arab News.