Syndicates active in fertiliser price hike, artificial shortages

Syndicates of fertiliser dealers and transport operators are driving volatility in the fertiliser market recently by creating artificial shortages and selling at prices much higher than government-set rates, a government intelligence report has revealed.

The report has also warned that fertilisers intended for agriculture may be diverted to tobacco production, potentially triggering a crisis in the farming sector.

According to the report, fertiliser dealers in Kishoreganj and Dimla upazilas in Nilphamari, and in Shailkupa upazila, Jhenaidah, are illegally hoarding their allocated stock, creating an artificial shortage and selling 50-kg DAP bags, which is priced at Tk 1,050, for Tk 1,400-1,700.

The report, prepared by the Special Branch (SB) of Bangladesh Police, a copy of which was obtained by The Financial Express (FE), includes recommendations such as ensuring fertiliser supply as per government allocations and enhancing surveillance to check syndication by dealers and transport companies.

The police intelligence agency has sent the special report to the relevant ministries, including the Ministry of Agriculture, to determine the next course of action on the issue.

Currently, the country's annual fertiliser demand exceeds 5.78 million tonnes, with 80 per cent met through imports and the rest produced by eight state-owned factories.

Current retail prices at the farmer level are fixed at Tk 27 per kg for urea and TSP, Tk 22 per kg for DAP and Tk 20 per kg for MoP.

The government provides subsidies amounting to Tk 21, Tk 40, Tk 40.92 and Tk 40 per kg for urea, TSP, DAP and MoP respectively.

The government imports fertilisers through its agencies -- BCIC (Bangladesh Chemical Industries Corporation) and BADC (Bangladesh Agriculture Development Corporation).

As of July in FY 2025-26, stocks stand at 0.63 million tonnes of urea, 0.217 million tonnes of TSP, 0.273 million tonnes of DAP, and 0.281 million tonnes of MoP-- enough to meet demand for the next three months, according to BADC and BCIC.

Both agencies maintain there is no actual shortage. However, prices have risen due to artificial shortages created by unscrupulous dealers and transport companies in some districts, the report mentioned.

The report said that as the government has not followed proper procedures in appointing dealers, some individuals have obtained multiple dealerships using different names and addresses, allowing a single dealer to dominate and control the market.

There are also allegations that political influence has been used to secure dealerships, enabling some to create an artificial crisis and push up prices.

Currently, the BCIC operates 35 warehouses, including buffer, factory, and transit facilities, with a total capacity of 0.351 million tonnes. Contractors often store excess fertiliser in the open, which can reduce quality and create opportunities for embezzlement.

Due to a shortage of storage facilities, the emergency stock of urea fertiliser has fallen from 0.7 million tonnes to 0.4 million tonnes.

A senior official of the agriculture ministry said that although fertilisers are distributed according to seasonal demand in each district, transporter and dealer syndicates are charging farmers more than the government-set prices by creating the impression of a supply shortage.

He added that the government has taken all necessary measures to address the issue.

The intelligence report has recommended measures to ensure that the same individual cannot obtain multiple dealer licences under different names.

It also suggested strengthening monitoring to prevent agricultural fertilisers from being diverted to industrial production, such as tobacco farming. It further recommended ensuring an uninterrupted gas supply and immediate release of fertilisers from mother vessels.

The SB also called for taking strict measures to prevent fertilisers from being sold above government-set prices.

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