Financial Times

Fertilizer importers losing heavily

By Nimesha Herath

Private fertilizer companies, smarting after the government withdrew a decades-old subsidy last month, have seen revenues drop by 80 percent and large scale downsizing of staff, industry sources said.“If there is no change in the policy we will have to close down,” one private sector importer said, adding: “We will wait to see how the situation changes over the next season and then make a decision.”

Fertilizer companies stopped imports from May 5 after the government decision. However urea is being imported by some other firms and sold at lower-than-market rates as these are smuggled goods.

The sources said that though there is no shortage of fertilizer, smalltime tea and paddy farmers have not started production because they are waiting for the subsidized fertilizer which is expected to be distributed by state agencies.
One source said that when a tender was recently called by the recent Coconut Cultivation Board one dubious company offered urea at Rs. 23,000 when the world market price is over Rs 30,000.

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