Urea prices up Tk6 per kg

The government has hiked urea fertiliser prices by Tk 6 per kg with effect from Monday.

Urea prices will now be Tk 20 per kg at the dealer level while it will be Tk 22 per kg for farmers, which was Tk 16 till July 31.

The Ministry of Agriculture in a notice on Monday said prices had been increased to keep urea use at a rational level and due to price hikes in the global market.

According to the ministry, the country’s annual demand for urea is 26 lakh tonnes. Of this, around 10.5 lakh tonnes are produced by domestic factories while imports meet the rest of the demand.

Per kg urea is sold at Tk 81 in the international market currently. That is why the government will still have to provide Tk 59 in subsidy for per kg fertiliser despite increasing prices by Tk 6.

An agriculture ministry press release said subsidy for per kg urea was Tk 15 in 2005-06.

Diammonium phosphate (DAP) fertiliser contains 18 per cent nitrogen, which is the main element of urea. The government provides DAP fertiliser at Tk 16 per kg, down from Tk 90 per kg, to encourage farmers to use it more than urea.

Due to subsidies, the use of DAP doubled, increasing to 16 lakh tonnes now from eight lakh tonnes in 2019.

It was expected that urea use would fall due to the increased use of DAP. But the opposite happened. Farmers used 26.5 lakh tonnes of urea in 2021, which was 25 lakh tonnes in 2019.

Fertiliser prices increased three to four times in the international market in FY22. As a result, the government subsidies also went up four times. In 2020-21, subsidies amounted to Tk 7,717 crore, which increased to Tk 28,000 crore in the next financial year.

There is adequate stock of fertilisers in the country. The urea stock for the Aman season (July-September) is 7.27 lakh tonnes against the demand of 6.19 lakh tonnes. The urea stock has a surplus of more than one lakh tonnes.

The triple superphosphate (TSP) stock for the same season is 3.09 lakh tonnes against the demand of

1.19 lakh tonnes. The DAP stock is 6.34 lakh tonnes against the demand of 2.25 lakh tonnes. The muriate of potash (MOP) stock is 2.1 lakh tonnes against the demand of 1.37 lakh tonnes.

The government provides farmers with all kinds of fertilisers at subsidised prices.