Gas crisis deepens country’s reliance on fertiliser imports
Bangladesh is becoming increasingly dependent on imports to meet its annual demand for chemical fertilisers as recurring gas shortages, ageing factories and disruptions in global raw material supplies continue to cripple domestic production.
The country’s seven state-owned fertiliser plants have a combined installed capacity of more than 37 lakh tonnes a year.
Yet they produced only 11.06 lakh tonnes in fiscal 2025-26 against a demand of 66 lakh tonnes, forcing Bangladesh to import more than two-thirds of its fertiliser requirements, according to data from the Bangladesh Chemical Industries Corporation (BCIC) and the agriculture ministry.
The previous fiscal year saw domestic production of 12.44 lakh tonnes against a demand of 67.47 lakh tonnes.
The widening production gap is increasing pressure on foreign currency reserves while exposing the country’s agriculture sector to global supply disruptions and price volatility.
Besides the state-owned factories, multinational joint venture Karnaphuli Fertilizer Company Limited (KAFCO) supplies around 5 lakh to 6 lakh tonnes of urea to BCIC annually, although its operations have also been disrupted by inadequate gas supplies this year.
The remaining demand is met through imports of urea, diammonium phosphate (DAP), triple superphosphate (TSP) and muriate of potash (MOP).
BCIC data show fertiliser imports rose from 38.67 lakh tonnes in FY2019-20 to nearly 47.8 lakh tonnes in FY2021-22 before peaking to more than 48 lakh tonnes in FY2022-23. The imports eased slightly afterwards. Even so, Bangladesh still imported 47.77 lakh tonnes in FY2023-24 and 44.78 lakh tonnes in FY2024-25.
Only two of the seven state-owned fertiliser plants are currently operating. The other five were shut at different times between March 4 and June 28 because of shortages of gas and other raw materials and have yet to resume operations.
Riaz Uddin Ahmed, former executive secretary of the Bangladesh Fertiliser Association, said the country’s growing reliance on imports has become more worrying amid geopolitical tensions and uncertainty in global energy markets.
“Domestic urea production depends on an uninterrupted gas supply. If gas supplies cannot be maintained, urea factories will remain closed and create another major deficit,” he said. “Considering both urea and non-urea fertilisers, Bangladesh could be heading toward a difficult period.”
SHORTAGES, AGEING PLANTS
Officials at BCIC and the Department of Agricultural Extension said inadequate gas supplies have sharply reduced domestic production, forcing the government to import larger quantities of fertiliser.
Bangladesh is entirely dependent on imported MOP, while domestic production of DAP and TSP remains far below demand.
The situation has been compounded by disruptions in international markets. Since February, tensions in the Middle East have affected LNG supplies, forcing the government to divert scarce gas away from fertiliser plants while disrupting supplies of imported raw materials and driving up prices.
Md Moniruzzaman, BCIC’s director (Commercial, Production and Research), said the corporation’s gas-based fertiliser plants require around 197 million cubic feet of natural gas a day to operate at full capacity.
They usually get only around one-third of the required amount, according to him.
“Despite the gas shortage, we produced 11.06 lakh tonnes of fertiliser in the last fiscal year. Had we received uninterrupted gas supplies throughout the year, we could have produced an additional 22 lakh to 25 lakh tonnes,” he said.
He said ageing machinery also limits production, as most of the plants require frequent maintenance and repairs.
For all latest news, follow The Daily Star's Google News channel. Only Shahjalal Fertilizer Company Ltd and Ghorashal-Polash Fertilizer PLC -- commissioned in 2016 and 2023 respectively -- are relatively new. The remaining five state-owned plants were established between 1965 and 2006.
BCIC distributes fertiliser through around 6,000 authorised dealers nationwide. Urea remains the country’s most widely used fertiliser, with annual demand of 26 lakh to 27 lakh tonnes, particularly during the boro and aman seasons.
DAP and TSP are mainly applied during land preparation, while MOP is widely used for rice, potato, vegetable and fruit cultivation to improve yields and crop quality.
The shortage has also crippled Chittagong Urea Fertilizer Limited (CUFL), which has remained shut since March 4.
“The factory remained operational for only four to five months in the last fiscal year due to inadequate gas supply. We produced around 65,000 tonnes of urea in FY2025-26, compared with 105,000 tonnes a year earlier. Had we received uninterrupted gas supplies, production could have reached nearly 150,000 tonnes,” said Uttam Chowdhury, the factory’s chief chemist.
Commissioned in 1987 with an installed annual capacity of 561,000 tonnes, the factory’s effective production capacity has steadily declined because of ageing machinery, officials said.
Gas shortages are not the only obstacle to domestic fertiliser production.
The country’s only state-owned DAP producer has remained idle since June 28 after failing to procure phosphoric acid through multiple international tenders.
Rabiul Alam Khan, deputy general manager (Commercial) of DAP Fertilizer Company Limited (DAPFCL), said the factory has been struggling to source phosphoric acid amid volatility in the international market.
“We floated a tender in January to import 20,000 tonnes of phosphoric acid, but the selected supplier failed to deliver the shipment,” he said.
“BCIC then invited fresh tenders on June 8 and June 23, but not a single company submitted bids because of volatility in the international market following the renewed conflict in the Middle East.”
BCIC has since floated two fresh tenders, scheduled to open on August 8 and September 9.
Rabiul said the plant had earlier remained shut for more than two months because of ammonia shortages after CUFL and KAFCO suspended operations.
“Now production has been halted again because of a shortage of imported phosphoric acid.”
Commissioned in 2006 with an annual production capacity of 6,60,000 tonnes, DAPFCL produced only 85,000 tonnes in FY2025-26.
FRESH LNG DISRUPTION
The outlook for domestic production has become more uncertain following a technical fault at a floating LNG terminal in Maheshkhali.
Petrobangla said on Wednesday that the disruption reduced LNG supply from the usual 950-1,050 million cubic feet a day to below 600 million cubic feet.
The resulting shortfall has affected gas supplies to households, industries and CNG filling stations nationwide.
In Chattogram, where two major fertiliser plants are located, industries are receiving reduced gas supplies.
Anupam Dutta, deputy general manager (Marketing, South Division) of Karnaphuli Gas Distribution Company Limited, said the region was facing a gas deficit of about 100 million cubic feet a day.
“We therefore curtail supplies to sectors identified by the government while trying to ensure that at least one of the city’s two fertiliser plants remains operational,” he said.
AMAN STOCK ‘SUFFICIENT’
Agriculture ministry officials, however, said current fertiliser stocks are sufficient to meet demand during the ongoing Aman season.
As of July 23, government stocks stood at 16.19 lakh tonnes, comprising 6.20 lakh tonnes of urea, 3.52 lakh tonnes of TSP, 4.51 lakh tonnes of DAP and 2.25 lakh tonnes of MOP.
While urea and TSP stocks were at expected levels, DAP and MOP inventories remained slightly below their desired levels.
Ministry data also show fertiliser demand during July and August in last year’s Aman season stood at 8.73 lakh tonnes.
Ahmed Faisal Imam, additional secretary of the Fertiliser Management and Monitoring Branch at the agriculture ministry, said, “We have sufficient fertiliser stocks for July, August and September, which should be enough to meet demand through October.”
He said Bangladesh continues to receive regular shipments from Morocco, Canada and Russia under its strategy of diversifying import sources.
Bangladesh has already received about 6,40,000 tonnes under a 1.2 million-tonne fertiliser import agreement with Saudi Arabia.
The remaining shipments have been delayed by the security situation around the Strait of Hormuz, although discussions are underway to reroute them through the Red Sea, Faisal said.
Meanwhile, KAFCO is expected to resume production on Thursday after remaining shut for about a month because of inadequate gas supplies, followed by a 17-day maintenance shutdown.
Comments