A state-owned petroleum giant from Qatar is hesitant to continue fertilizer sales to Bangladesh in the upcoming fiscal year due to repeated payment delays, raising concerns over the country’s agricultural supply chain.

Qatar Energy Raises Red Flags Over Payment Delays

Qatar Energy recently informed Bangladeshi authorities that it will not enter into any agreements for the fiscal year 2025-26 unless pending payments for previous shipments are cleared. The payments for the 6th, 7th, and 8th fertilizer consignments were delayed by 3 days, 7 days, and 13 days, respectively, causing frustration on the supplier’s end.

According to Janata Bank, the payment for the most recent 9th consignment—totaling 12.50 million tonnes of fertilizer—was due on March 14, yet it remains unpaid.

Government Scrambles to Resolve Crisis

On March 20, the Ministry of Industries urged the Finance Ministry and Bangladesh Bank (BB) to take immediate action to settle the outstanding dues under the Government-to-Government (G2G) agreement. Officials warned that any further delay could disrupt the country’s fertilizer supply, critically impacting farmers and agricultural output.

Breakdown of Bangladesh’s Fertilizer Procurement Plan

For the fiscal year 2024-25, Bangladesh planned to import:

• 0.48 million tonnes (16 lots) from Saudi Basic Industries Corporation (SABIC), Saudi Arabia
• 0.27 million tonnes (9 lots) from Qatar Energy Marketing, Qatar
• 0.21 million tonnes (7 lots) from FertiGlobe UAE

While payments for 14 lots of fertilizer from SABIC have been successfully processed, a significant backlog remains:

• 15th lot from SABIC (worth $10.35 million) has been overdue since February 26
• 3rd lot from Fertiglobe UAE has arrived, but its payment ($14.00 million) was scheduled for late March and remains unsettled

Potential Consequences of Further Delays

The industries ministry has raised concerns that failure to make timely payments may lead to:

1. Suspension of future fertilizer imports, exacerbating agricultural shortages
2. Financial penalties from foreign banks due to missed Letter of Credit (LC) deadlines
3. Strained diplomatic ties with key fertilizer suppliers

Central Bank Steps In

When contacted, a high-ranking official assured that Bangladesh Bank has already taken measures to resolve the issue. However, experts caution that without structural reforms in payment processing and financial discipline, Bangladesh could face similar disruptions in future import agreements.

As global fertilizer demand surges, securing a stable supply chain is critical for Bangladesh’s food security and agricultural sustainability.

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