Amidst speculation that foreign exchange coffers are fast running out of dollars, fertiliser importers are caught in a tight situation unable to bring down adequate stocks for the next Yala season even at skyrocketing global prices. The ban on chemical fertiliser imports was lifted about two weeks back. Agriculture Minister Mahindananda Aluthgamage during a meeting [...]

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Fertilisers allocated for tea industry grabbed

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Amidst speculation that foreign exchange coffers are fast running out of dollars, fertiliser importers are caught in a tight situation unable to bring down adequate stocks for the next Yala season even at skyrocketing global prices. The ban on chemical fertiliser imports was lifted about two weeks back.

Agriculture Minister Mahindananda Aluthgamage during a meeting with the importers of chemical fertiliser at his ministry in Colombo on Thursday has informed that the government is likely to pay a “substantial amount” on their long overdue subsidy payments in early January.

However it is learnt that in a discussion with the Treasury Secretary S.R. Attygalle, this is not possible as the latter had insisted that they have no cash to pay even by January.

The Minister has informed the private sector companies that they can import and that there is no restriction on the amount of fertiliser they have to import.

But importers are faced with an insufficient resource base to purchase chemical fertilisers as a result of the large outstanding and long overdue subsidy payment (Rs. 27 billion) by the government that is reflecting on their accounts with the banks.

In this respect, during the meeting they requested the Agriculture Ministry to intervene so that the facilities will get opened for them to open Letters of Credit.

Banks do not consider fertiliser importers favourably as they have an overdue payment as a result of which LCs are withheld and with the dollar crunch their problems are further compounded.

Importers noted that they will practically not import due to the looming dollar shortage without which they will be unable to open LCs to purchase fertiliser.

The last time importers tried to purchase fertiliser opening an LC had taken about one month, importers said. About two months back importers were asked to purchase fertiliser for the tea sector.

Purchasing in small quantites will not be adequate, one importer pointed out adding that the import values on the main items are substantial.

Faced with the current crisis importers have not found a solution to their problems even at the meeting with the minister as the government has no dollars to give out. Fertiliser will cost about US$30 million for 30,000 MT.

In the meantime, there is a scramble for chemical fertiliser by different sectors and this has caused a grave situation in Sri Lanka as various sectors await cargo to arrive and attempt to grab it by hook or by crook. One importer pointed out that a share of the stocks of fertiliser meant for the tea sector were suddenly being asked to be diverted for maize farmers.

It is learnt that the ministry linking with maize cultivation had been in talks with a high level official at the President’s Office who had convinced them to release 5000 MT of this fertiliser. But importers were thrown into a fix as they had already sold this to tea smallholders and it was to be distributed based on the list provided to them by the Tea Commissioner.

As a result of the issue the importer was compelled to issue small quantities of the fertiliser to maize farmers and this has now turned into a major issue.

Meanwhile, it is also learnt that from the next consignment of fertiliser once again allocated specifically for the tea industry due by Monday (December 20) the importer is already receiving requests from the Agriculture Ministry that this should be shared with vegetable growers.

It is also learnt that authorities are creating an issue with the importer saying they are not being helpful and indirectly threatening them by stating that the license to import fertiliser should be obtained from the Agriculture Ministry and not the Plantation Ministry.

Interestingly, the government too is now turning to the chemical fertiliser importers as opposed to following government policy to adapt to organic farming.

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