Bangladesh seeks alternatives as Mideast war disrupts fertiliser imports

The Bangladesh Chemical Industries Corporation (BCIC) has been forced to cancel two tenders for 2,00,000 tonnes of urea as the Middle East war involving Iran disrupts supply chains from the Middle East, according to official sources.

The geopolitical instability has created significant uncertainty regarding whether the 17 registered suppliers can deliver fertiliser through the volatile Strait of Hormuz. In response, the BCIC has shifted from its restricted supplier list to an open international tender, inviting global bidders – including Singapore-based firms – to secure the essential agricultural input.

Bangladesh traditionally imports fertiliser from Middle Eastern countries such as Saudi Arabia, Qatar and the United Arab Emirates. While Qatar and the UAE primarily supply urea, Saudi Arabia provides both urea and diammonium phosphate (DAP).

With maritime transport through the Strait of Hormuz becoming increasingly uncertain, the government is now considering alternative sources, including China, Egypt and Russia. Russia, in particular, has emerged as a major global supplier amid the ongoing crisis.

BCIC Chairman Fazlur Rahman said the decision to cancel the earlier tenders was driven by uncertainty surrounding the capacity of existing suppliers.

"We have issued a fresh international tender to ensure broader participation, including suppliers from alternative sources," he told TBS, adding that several Singapore-based trading firms could also join the bidding process.

He, however, assured that there would be no fertiliser shortage during the Boro season, although attention has now shifted to securing supplies for the Aman season starting in June.

"If we fail to ensure timely urea imports, it could impact agricultural production," he warned.

Fazlur noted that only the Shahjalal Fertiliser Factory is currently operational among the country's domestic plants, with others remaining shut due to gas shortages. Efforts are underway to increase stockpiles and assess all possible import options.

Quoting a meeting held yesterday with the energy ministry, he said, "We have consulted with the energy ministry and requested the guarantee of gas supplies for the Ghorashal-Polash Urea Fertiliser Factory to avert the impending fertiliser crisis. We anticipate that it will be possible to operationalise the factory within the coming week."

Under a government-to-government agreement, the United Arab Emirates has indicated it could supply up to 3,00,000 tonnes of fertiliser, provided safe navigation through the Strait of Hormuz is ensured, Fazlur said, adding that Bangladesh is now working on facilitating shipping permissions and related processes.

Meanwhile, the government is also working to explore whether US sanctions on Russia could be eased to allow fertiliser imports from that country, he said.

Suppliers, however, say imports from the Middle East have virtually come to a halt. In addition to logistical disruptions, global fertiliser prices have surged sharply, dampening supplier interest.

Urea prices surge

Urea prices have increased by around $300 per tonne, reaching close to $700, while DAP prices have risen from $700 to $850 per tonne and triple super phosphate (TSP) from $500 to $650. Prices have continued to climb following China's decision to halt fertiliser exports temporarily.

Industry insiders warn that alternative sources are also under strain. China's export suspension and restrictions on Russian imports due to sanctions have further tightened global supply. Import-dependent countries are now competing for limited supplies, intensifying the crisis.

Bangladesh's annual demand for urea stands at around 26 lakh tonnes, of which around 10 lakh tonnes are produced domestically. The rest must be imported, although local production has been hampered by persistent gas shortages.

Following the onset of the Iran war and the resulting energy crisis, most fertiliser factories in the country were shut down, with only one currently in operation.

Overall, Bangladesh's annual fertiliser demand exceeds 60 lakh tonnes, covering both urea and non-urea varieties. A significant portion is used during the Boro and Aman seasons, which together underpin the country's annual rice production of around 4 crore tonnes and overall food security.