Govt approves purchase of 70,000 tonnes of urea, 20,000 tonnes of phosphoric acid

The government has approved the purchase of 70,000 tonnes of urea fertiliser and the import of 20,000 tonnes of phosphoric acid, a key raw material for producing diammonium phosphate (DAP) fertiliser, at a combined cost of around Tk650 crore.

The proposals were approved at a meeting of the Cabinet Committee on Government Purchase, chaired by Finance Minister Amir Khosru Mahmud Chowdhury at the Secretariat today (19 October).

Under the approved proposals, 30,000 tonnes of bagged granular urea will be purchased from Karnaphuli Fertiliser Company Limited (Kafco) for Tk151.30 crore, at $408.375 per tonne.

Another 40,000 tonnes of bulk granular urea will be procured from Saudi Arabia's SABIC Agri-Nutrients Company for Tk213.24 crore, at $431.67 per tonne.

The urea purchases were proposed by the Ministry of Industries and will be implemented through the Bangladesh Chemical Industries Corporation (BCIC). The cost will be covered by allocations under the Ministry of Agriculture's subsidy budget.

The committee also approved the import of 20,000 tonnes of phosphoric acid for Chattogram-based DAP Fertiliser Company Limited (DFCL) at an estimated cost of Tk285 crore, or $1,087 per tonne.

The acid will be purchased from UAE-based Genttrade FZE through an international open tender. Only one company participated in the tender and was found technically acceptable. The purchase will be implemented through BCIC and financed from the government's own funds.

According to documents presented at the meeting, Bangladesh's urea demand for the 2026-27 fiscal year is estimated at 30 lakh tonnes. The government plans to procure 5.50 lakh tonnes from Kafco during the year.

Meanwhile, producing the targeted 1.40 lakh tonnes of DAP fertiliser in the current fiscal year will require a total of 165,800 tonnes of phosphoric acid.