Bangladesh Looks Beyond Middle East for Fertiliser as War Threatens Supply: TBS Report
Bangladesh is looking for alternative sources of fertiliser as the ongoing Middle East conflict threatens shipping through key routes used for imports. The government is negotiating new government-to-government agreements with Russia, Malaysia and Brunei ahead of the upcoming Boro season.
Reading
In a Nutshell:
- As per a TBS report, the government is seeking alternative sources of urea and negotiating government-to-government agreements with Russia, Malaysia, and Brunei as conflict in the Middle East threatens traditional fertilizer supply routes.
- Discussions are underway with Russia's Prodintorg, Malaysia's Petronas Chemicals and Brunei's BFI.
- The government is also continuing urea imports from the UAE's Fertiglobe, but under revised cost-and-freight terms.
- Bangladesh's annual urea demand is around 26 lakh tonnes, with about 14 lakh tonnes required during the peak Boro season from December to March.
- As of 13 September, Bangladesh had around 3.76 lakh tonnes of urea in stock. Bangladesh already imports MOP fertiliser from Russia under a long-term agreement.
Context
Bangladesh relies heavily on imported fertiliser to meet its domestic needs. The ongoing conflict in the Middle East has increased the risk of supply disruptions, as key shipping routes such as the Strait of Hormuz and Bab el-Mandeb are being affected. As per TBS report, to reduce this risk, the government is looking for fertiliser suppliers outside the Middle East and negotiating with Russia, Malaysia and Brunei for urea and adjusting imports from existing suppliers to manage higher shipping risks. The move comes after fertiliser supply had already become a concern during the Aman season. Although the government says national stocks are enough, farmers in several areas have struggled to buy fertiliser from authorised dealers. The TBS report suggests that the main problem was not a shortage of fertiliser nationwide, but weaknesses in distribution and access at the local level.
Why it matters
With the Boro season approaching, fertilizer demand is expected to rise sharply. Bangladesh will need around 14 lakh tonnes of urea between December and March. As the Middle East conflict threatens major shipping routes, the government is trying to secure supplies from different sources. It has approved private imports and is negotiating government-to-government deals with Russia, Malaysia and Brunei. However, having enough fertilizer in national reserves is not enough on its own. Recent shortages show that stock at the government level does not always reach farmers easily or at official prices. Bangladesh therefore may need to work to improve both its overseas supply arrangements and its local distribution system.
What we think
Diversifying overseas fertilizer sources is indeed a smart move to reduce wartime shipping risks, but if it does not reach the local farmers due to internal corruption, it remains pointless. Therefore, fixing domestic distribution is just as urgent as securing foreign imports.