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Fertiliser sale ’dull,’ traders surrendering dealership

By Govinda Shil
Frustrated fertiliser traders are for the first time surrendering their dealerships, blaming the government's "inconsistent" policy, while the agriculture minister calls them seasonal birds."
Too many dealers, price control. low price for farm output and huge supply of fertiliser are seen as key factors for business being unattractive, leading the dealers to call it quits.
The dealers believe the government's projection for urea demand is too high for this year — 25 lakh tonnes — which has made urea business "unattractive." According to market sources, sales have gone down
by as much as 30 per cent.
"This demand is over-estimated? said Bangladesh Fertiliser Association's executive secretary Abdul Baten.
He told The Daily Star, a total of 400 dealers have surrendered their dealership so far because farmers are not buying urea."
Agriculture Minister Malia Chowdhury claims the number of dealers who have surrendered their dealership so far is less than 100.
Traders say they are getting nothing out of their security de posit with the Bangladesh Chemical Industries Corpora tion (BCIC). A total of Tk 80 crore came from approximately 3,800 dealers to the corpora tlon s coffers.
Besides, they say. their profit margin fell "drastically" this year due to low sales and low prices of urea.
"Why will the farmers buy urea when the prices of paddy and jute are quite low? asks Baten.
BCIC officials back Baten. but do not endorse the dealers' "behaviour''.
"Withdrawal of trading license does not indicate a professional behavior? one official said. "Every business has its lean and peak seasons. Sometime you will do good business and sometime you won't? Some 1.000 dealers have taken new licenses, which reflects there is a business, the official added.
The igricui.ure minister agrees. She said seasonal birds' are leaving tlie business because there is no way of manipulating prices now.
The minister told The Daily Star that the government had been able to check smuggling out of urea to borderinglndia and Myanmar. "And we have readjusted price of this soil nu trlent. As a result, super profit seekers are frustrated?
Baten raises another allega tion against the government, which, he said, harasses dealers unnecessarily. "Last year. 23 members were detained."
The BFA leader demands the government review its supply and demand projection immediately. and allow optional delivery of urea till December, when btialnbss is tisually good.
The minister denies the government arrested 23 dealers last year. She says only smugglers were arrested and the BFA could not prove that they were not guilty.
- She said money'has not been returned so far to the dealers surrendering their dealership. The government is also keeping a record of them so that the government may deny them dealership in future, she added.
She also defended low farm prices, saying the prices maybe "comparatively low" but farmers had a bumper harvest and their total sales have not declined.
A former BFA leader said the government should remove the existing price disparity of urea. The buffer stock price of urea is Tk 265 for a 50-kg bag, while it is Tk 240 at the mill gates.
Citing a recent survey, he noted that the sales have declined by 30 per cent this time
this year due to price hike. "And the government is supplying 10 per cent more urea to the dealers."
Last year, the demand for urea was 21 lakh tonnes, while Die government puts the demand at 25 lakh tonnes for this year.
"As a result, at least 40 per cent urea is remaining unsold this time. This is causing a financial burden to the dealers." he explained.
According to a market survey, a 50 kg bag was sold at Tk 285 to Tk 327 in Chittagong. Tk 270 to Tk 300 in Rangpur. and Tk 273 to Tk 300 in Jessore during the first half of August.