Bangladesh has secured a two-year deal to import 400,000 tons of fertilizer from Saudi Arabia. The Bangladesh Agricultural Development Corporation (BADC) announced this agreement on Sunday. This initiative aims to boost food security in the South Asian nation since it is to increase food production. The country faces rising food demand amid decreasing farming land due to rapid urbanization and a growing population.
Strengthening Economic and Agricultural Collaboration
The BADC signed the new agreement with Saudi state-owned company Ma’aden in Riyadh on Dec. 15. This follows years-long cooperation between the two entities. “Good quality fertilizer plays a vital role in ensuring food security for our 175 million people. This fertilizer helps us increase productivity by many folds,” stated BADC general manager Ahmed Hassan Al-Mahmud.
Under the latest deal, Ma’aden will supply 400,000 tonnes of diammonium phosphate (DAP) fertilizer annually until 2026. Additionally, Ma’aden will provide training for Bangladeshi farmers. “The Saudi state-owned fertilizer company offered to provide training for our farmers, for the purpose of knowledge transfer on optimizing the use of the DAP fertilizers,” Al-Mahmud added. Ma’aden has also offered to build fertilizer warehouses in Bangladesh.
Economic and Logistical Advantages
The Saudi imports will contribute to about one-third of Bangladesh’s annual DAP fertilizer needs, which stands at about 1.3 million tonnes. Bangladesh also stands to benefit more from the latest agreement, as the fertilizers cost $2 less per tonne compared to the average market price. “It will save us a significant amount of money,” Al-Mahmud noted. “Saudi Arabia has been our trusted supplier for a long time, and we can purchase it at a reasonable rate compared with other sources.”
Reliability of Saudi Supply
While Bangladesh also imports from China and Morocco, Al-Mahmud emphasized that the Kingdom is a “dependable and reliable source.” “We have been importing fertilizer from the Kingdom for more than 15 years. It takes only around 2 weeks to import fertilizer from the Kingdom, while from Morocco it takes more than 6 weeks. From that perspective also, Saudi Arabia is our preferred country for importing fertilizer,” he concluded.
Saudi Arabia stands as a leading global exporter of fertilizers, with exports valued at $6.46 billion in 2022. This positions fertilizers as the fourth most exported product from the Kingdom. Moreover, the agricultural sector contributed 2.71% to Saudi Arabia’s GDP in 2023, reflecting a slight increase from 2.4% in 2022.
Ma’aden, the Saudi Arabian Mining Company, plays a pivotal role in this industry. Their integrated fertilizer production complex at Ras Al Khair boasts an annual production capacity of up to 6 million tons. Additionally, Ma’aden’s ‘Phosphate 3’ expansion aims to increase phosphate fertilizer production capacity by 3 million tons, reaching a total of 9 million tons per year.
