“Boosting local urea production is cost-effective due to our abundant and affordable raw materials.”– Dr Jahangir Alam, Agricultural economist and researcher
Sustainable organic farming is on the upswing in the developed world, with a continuous decline in the reliance on chemical fertilizers. Concurrently, our farmers are increasingly enthusiastic about integrating organic fertilizers into their agricultural practices. Nonetheless, the transition to organic fertilizers helps mitigate the need for chemical counterparts. When addressing food security concerns, it’s imperative to maintain consistent production levels, no matter the circumstances.
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While Bangladesh’s economy is predominantly agricultural, it heavily depends on fertilizer imports to satisfy its needs. According to data from the Bangladesh Fertilizer Association, Bangladesh’s urea production currently stands at around 10 lakh tons, with imports from the UAE, Saudi Arabia, and Qatar covering the remaining demand. The Department of Agricultural Extension (DAE) anticipates a demand of 34.02 lakh tons (3.4 million) for urea fertilizer in the fiscal years 2022-2023.
Farmers highly appreciate urea for its nitrogen-rich composition, environmental friendliness, ease of application, and impressive capacity to boost crop yields. It serves not only as a top-notch nitrogen fertilizer for crops but also as a direct livestock feed additive. This synthetic compound is the result of the combination of ammonia and carbon dioxide. Urea’s impact on human production and daily life is substantial, as fluctuations in its prices have a direct bearing on food production and pricing in most countries including Bangladesh.
How many Urea factories are currently running in Bangladesh?
Currently, there are 13 operational enterprises under BCIC, with 6 of them dedicated to the production of urea fertilizers. The total installed capacity of these six urea fertilizer factories is 2.30 million metric tons per year. However, the aging of these facilities has resulted in a decrease in their production capacities.
To meet the increasing demand for urea fertilizers, the government has taken the initiative to build a 2800 MT capacity urea fertilizer factory in the northern region of Bangladesh.
- Project Cost: The total estimated cost for the construction of the urea fertilizer factory is Tk15,500.20 crore.
- Progress Update: According to Industries Minister Nurul Majid Mahmud Humayun, as of the latest update, over 80 percent of the project’s construction works have been completed.
- Financial advancement: Financial progress for the project has exceeded 71 percent. This suggests that funding for the project is on schedule and that financial resources are being effectively managed.
- Project completion date: The construction of the factory is scheduled to conclude in June 2024.
- Purpose: The primary objective of the project is to reduce the country’s dependency on imported urea fertilizers, thereby increasing self-sufficiency in agricultural inputs and improving food security.
- Pre-feasibility Study: The government has already completed a pre-feasibility study for the urea fertilizer factory. This study likely assessed various aspects, including market demand, environmental impact, and technical feasibility, to inform the project’s implementation.
- Natural Gas Availability: Natural gas is a critical resource for fertilizer production. The minister highlighted that the next step in the project’s development will depend on the availability of natural gas.
- Impact: Once operational, the urea fertilizer factory is expected to have a substantial impact on the agricultural sector by providing locally produced fertilizers, reducing import costs, and contributing to national agricultural self-sufficiency.
Why is there an increasing demand for urea fertilizer factories in Bangladesh?
The global economy has been severely impacted by the COVID-19 pandemic for the past two years. Meanwhile, the Russia-Ukraine conflict erupted as the world was attempting to recover. However, the government mitigates the cost burden on farmers by subsidizing fertilizer prices, regardless of threefold fluctuations in global costs driven by events like the Russia-Ukraine conflict.
“Producing urea is much cheaper for us, so the authorities should try to increase the production ability in the country. The abundance and relatively low cost of the raw materials contribute to the cost-effectiveness of urea production.”Dr Jahangir Alam
Agricultural economist and researcher
As the Jamuna Fertilizer Factory, the sole manufacturer of Granular Urea in the nation, and Chittagong Urea Fertilizer Limited (CUFL) cease production due to gas shortages, their respective daily production capacities of 1700 metric tons of Urea remain untapped. It is high time to reevaluate the government’s strategy and seek out alternative sources.
Agriculture relies heavily on urea as an accessible and cost-effective nitrogen fertilizer. With 46% nitrogen concentration and adaptability in application, it stands as a fundamental asset for enhancing crop productivity and quality. By providing plants with the required nitrogen, urea fosters robust growth, boosts photosynthesis, and ensures efficient resource distribution toward reproductive stages.
The surging expansion of the food and food services industries within the population is predominantly motivating farmers and buyers to adopt urea fertilizer in their agricultural practices to boost productivity.
According to USDA, the total rice production has increased by 2% to 36.2 million metric tons, and total wheat production has increased by 2.7% to 1.13 million metric tons in the fiscal year 2022-2023. The Aman season requires seven-and-a-half lakh tons of urea, with Boro following closely as our largest crop, using up 60% of the available fertilizer. Meeting such an immense demand requires an enormous quantity of urea, and without the presence of well-functioning urea factories, achieving this production volume is unfeasible.
Sustainable organic farming is gaining momentum in developed countries, reducing reliance on chemical fertilizers. Bangladesh is also witnessing a growing interest in organic fertilizers. However, the transition to organic fertilizers should be balanced with maintaining consistent production levels, especially for a predominantly agricultural economy like Bangladesh.
Currently, Bangladesh heavily depends on fertilizer imports, particularly urea, due to its abundance and cost-effectiveness. Urea plays a vital role in agriculture, not only as a nitrogen-rich fertilizer but also as a livestock feed additive. Fluctuations in urea prices directly impact food production and pricing in the country.
This project, estimated at Tk15,500.20 crore, has made significant progress, with over 80 percent of construction completed and financial advancement exceeding 71 percent. The project’s completion in June 2024 aims to reduce dependency on imported urea, enhance agricultural self-sufficiency, and improve food security.