Gloom besets fertiliser sector

WHEN experts discuss in many forums that Bangladesh has nearly attained food security, the first question that comes to mind is whether our agriculture sector is capable to feed the burgeoning population where net arable land is on the decline. The challenge of attaining sustainable food security perhaps will not be eliminated. While we proclaim positively about the improvement in agriculture productivity, we face a negative scenario in the fertiliser sector.
Agriculture and fertiliser sectors are inherently dependent on one another. Among the many needed soil nutrients; nitrogen, sulfur and phosphorous based chemical fertilisers are largely used in Bangladesh. The trend of balanced and efficient fertiliser consumption over past few years is evident for improving agriculture productivity, mostly for high yield variety rice production. Almost all the crops use chemical fertiliser to supply and maintain soil nutrients for higher yield. In supplying balanced nutrients to the soil, urea usage constitutes about 65% of total chemical fertiliser consumed in 2010-11, which is about 2.7 million metric tons. In 2011-12 consumption urea consumption was about 2.3 million metric tons.
According to Unnayan Onneshan's study "Future Fertiliser Demand for Sustaining Rice production in Bangladesh: A Quantitative Analysis," demand for chemical fertilisers by 2050 would be about 7.5 million metric tons per annum (urea- 3.8 million tons, Super Phosphates- 2 million tons and Murate of Potash- 1.7 million tons) based on recommended nutrient dose. While the actual consumption is estimated as per past trend such as urea -- about 3 million tons per annum, Super Phosphates -- 0.7 million metric tons per annum and Murate of Potash -- about 0.6 million metric tons per annum. Thus, we always use less fertiliser than recommended dose.
Presently, seven fertiliser factories, of which six are state-owned and one is public private partnership (PPP) having total productive capacity about 2.5 million. Shahjalal fertiliser is in implementation stage and is expected to start operations around 2016. Deterioration of productivity of state-owned factories went into steep decline after 2007. Reasons are obvious: (1) aging of technology and the plant itself (as can be seen in Table), (2) poor maintainability of the equipment and machineries, (3) heavy gas rationing on fertiliser sector -- all these factors have compounded to cut production dramatically. Because of plant aging, most of the state-owned factories consume as much as double the gas than a new or well maintained plant does. The lone PPP fertiliser plant in Bangladesh having high energy efficiency remains unproductive because of gas rationing. The outcome is quite pathetic. The total urea production from 7 fertiliser factories has dropped from 2.5 million tons to about half from 2005 to 2012 and foreign import has increased to more than one million tons per annum. The national exchequer now spends about $0.5billion dollars to import urea.
Given this context, the six urea fertiliser factories under Bangladesh Chemical Industries Corporation (BCIC) are capable of producing 1.8 million tons per annum at approximately 65-70% capacity if full gas supply about 226 million cubic standard feet per day (mmscfd) is ensured. As many of the state-owned fertiliser factories are in various stages of obsolescence and no productivity improvement schemes have been put into place, it is expected that over time, productivity will continue to decline while consuming more gas. KAFCO, the only PPP plant in the country, is capable of producing 0.70 million metric tons urea and 0.15 million metric tons ammonia at 63 mmscfd gas supply. So, total gas demand of fertiliser sector is about 290 mmscfd which constitutes about 12% of country's present gas production.
Had Bangladesh several state of the art technology plants like JFCL, KAFCO or the upcoming SFCL, current and future urea demand could have been produced by using only 225 mmscfd instead of 290 mmscfd gas supply. It would pave the way for saving a significant amount of natural gas and also a huge amount of foreign currency. The new SFCL factory would be able to supply about 0.58 million tons a year while BCIC's other old factories will continue to deteriorate, resulting in falling production. Hence the demand-supply gap would continue to exist in the future at the current level.
To secure the country's urea fertiliser now and in the future, the economic option is to produce domestically. Efficiency improvement of fertiliser sector in terms of higher production at less gas consumption is vital for survival of the crucial sector. It is imperative that policymakers initiate a long term scheme for developing the fertiliser sector that will provide a roadmap for plant renovation at right time and the gradual replacement of old plants over a definite timetable. If BCIC sits idle and misses the right time to build new facilities, Bangladesh will continue with its import dependency and we will continue to expend precious foreign exchange. In the final analysis of things, inaction today could very well sow the seeds of destruction for the fertiliser sector as has been the case with jute.

The writer is Assistant Editor, The Daily Star.