30,000 tons of urea to be procured

At a cost of Tk 227 cr

Staff Correspondent: The Ministry of Industries has taken initiative to procure 30,000 metric tons of bagged granular urea fertilizer from Karnafuli Fertilizer Company Limited (Kafco) in the 18th lot to meet the demand of fertilizers in the agricultural sector of the country. The total cost for this will be Tk 226.69 crore.
According to the Ministry of Industries, the purchase proposal from Bangladesh Chemical Industries Corporation (BCIC) was sent to the Ministry of Industries on April 20.
The Ministry of Agriculture has fixed the demand for urea fertilizer at 2.8 million metric tons and the security reserves at least 7 million metric tons for the fiscal year 2021-2022, with a total of 3.3 million metric tons. In view of this demand, the annual collection plan prepared by BCIC was approved by the Ministry of Industries on 20 April 2021. Subsequently, the BCIC revised its annual collection plan by reviewing the actual production, imports and sales for the month of July 2021.
In order to avoid unforeseen risks in the revised plan, a total reserve of 34.40 million metric tons, including 140,000 metric tons, has been set aside, which was approved by the Ministry of Industries on 28 September 2021.
There is a plan to import 16 lakh 70 thousand metric tons of fertilizer in the fiscal year 2021-2022. A total expenditure of Tk 6,495 crore 6 lakh 7 thousand has been incurred for this.
In the mentioned procurement plan, the amount of purchase of urea fertilizer from Kafco, Bangladesh has been fixed at 650,000 metric tons. Considering the monthly demand of the Ministry of Agriculture, limited capacity of BCIC’s warehouses and Kafco’s monthly production capacity, 850,000 metric tons of urea fertilizer will be procured in 22 lots of 30,000 metric tons between July 2021 and June 2022.
Karnafuli Fertilizer Company Limited is a joint venture between the Government of Bangladesh. Urea fertilizer is being procured from this company under long term contract. The long-term agreement with Kafco and the amendment agreement contain pricing formulas.
According to sources, a letter was sent to Kafco by BCIC asking it to send a price offer for the purchase of 30,000 metric tonnes of bagged granular urea fertilizer in the 18th lot in FY 2021-2022. According to four bulletins published on April 14, 2022, Kafco has sent a price offer of 30,000 metric tons of bagged granular urea fertilizer for the 18th lot, which will remain in force till May 16.
The FOB price of bulk urea fertilizer proposed by Kafco is $81.50 per metric ton. According to the agreement, $5 per metric ton baggage will be added. In addition bags and yarn required for bagging will be provided by BCIC.
As per FOB (Kafco Bagging House), the purchase price of 30,000 metric tons of fertilizer will be $ 8.50 per metric ton of bagged granular urea fertilizer (FOB US ?? 61.50 + bagging charge US $ 5.00). 229,69,43,650 in Bangladeshi currency equivalent to 72,95,000 US dollars. Kafco’s 16th lot had a price of $935.125 per metric ton of fertilizer.
Kafco’s 16th lot had a price of $935.125 per metric ton of fertilizer. Sources said that the price recommended in the price review published in the bulletin on the due date was consistent with the current international market price.
A procurement proposal in this regard will be presented at the next meeting of the Cabinet Committee on Public Procurement chaired by Finance Minister AHM Mustafa Kamal for approval, sources said.