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Fertiliser for Maha season delayed

28 Aug 2022

By Asiri Fernando   The Ministry of Agriculture has decided to amend a tender for 150,000 MT of urea needed for the Maha cultivation season, due to the lack of interest by bidders and complications caused by bureaucratic constraints and financing, The Sunday Morning learns. According to a senior Ministry official who wished to remain unnamed, the Ministry has only received bids for 12,500 MT of urea out of the 150,000 MT tendered for. The tender is to be closed on Monday (29). Department of Agrarian Development Commissioner General A.H.M.L. Aberathne confirmed to The Sunday Morning that an estimated 150,000 MT of urea was required to supply farmers and growers during the Maha season and that the procurement process was ongoing. “We are opening a new tender for 125,000 MT of urea on Wednesday (31) because we desperately need to get this fertiliser down as soon as possible for the Maha Season. Our agriculture system and food security cannot survive another crop season without fertiliser. Even after nearly 50 days of the tender being announced, we only got one bidder, and that too only for 12,500 MT,” the Ministry official stressed. According to the official, bidders are reluctant to bid for the tender due to local banks not issuing them with bid bonds, while also being reluctant to open Letters of Credit (LCs) for the tenders due to the ongoing forex crisis. The official also pointed out that donor agencies that had come forward to help Sri Lanka with funding needed to import urea and Muriate of Potash (MOP) fertiliser had their own guidelines and list of preferred countries they worked with, thereby limiting the scope of the suppliers and pushing costs higher due to lack of competition.  It is understood that some of the donor agencies do not list Russia, Ukraine, and Jordan as preferred countries, despite them being major producers, and stockpile fertiliser. It is understood that when sourcing fund guarantees from such donor agencies, they require the LCs and performance bonds to issue the relevant paperwork for the tender to be awarded. As such, the reluctance of local banks to get involved in the process has further complicated the procurement process. However, when contacted, Minister of Agriculture Mahinda Amaraweera said that while there were “hardships” in importing the required fertiliser stocks, he was confident that they would arrive in the country by mid-October.  Minister Amaraweera confirmed the requirement for 150,000 MT of urea and an unspecified volume of MOP, adding that the procurement process would be completed in the coming days.  According to him, the World Bank has come forward to provide Sri Lanka $ 110 million for the import of fertiliser for the Maha season. It is understood that the Asian Development Bank (ADB) will provide funds for the import of MOP fertiliser.   


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