Agri Biz
Fertilizer Prices in Bangladesh Surge by 105% Amid Ukraine War
In a recent study conducted by international humanitarian organization ActionAid, it has been revealed that the ongoing food and energy crisis, stemming from Russia’s invasion of Ukraine, has led to a significant escalation in the cost of living in some of the world’s most vulnerable communities. Bangladesh, in particular, has experienced substantial increases in various essential commodities, disproportionately impacting marginalized groups.
The study found that in Bangladesh, fertilizer prices have skyrocketed by 105%, while sugar prices have surged by 60%. Additionally, petrol prices have risen by 47%, and even the cost of sanitary pads has increased by 23%. These price hikes have posed numerous challenges, with women, girls, and children being particularly hard-hit. The report highlights how this situation has resulted in compromised education, nutrition, and overall health for these communities.
The study involved a survey of over 1,000 community members and leaders across 14 countries in Asia, Africa, and the Caribbean. It revealed that fertilizer prices have surged by more than 115% during the monitoring period, while petrol and sanitary pad costs have risen by 80% or more. Consequently, child marriage rates have soared, women’s health has deteriorated, and mental health conditions have worsened. These distressing trends persist despite the recent 11.7% decline in global food prices, as reported by the UN Food and Agriculture Organization’s Food Price Index since February 2022.
Alberta Guerra, Global Policy Analyst for ActionAid, emphasizes the disproportionate impact on vulnerable populations worldwide, particularly women and girls. She points out that these groups bear the brunt of surging food, fuel, and fertilizer prices, facing multiple crises that affect their food security, education, freedom from child marriage, and mental well-being.
The report sheds light on the intersecting challenges faced by Bangladesh, including climate disasters, the Ukraine-Russia war, the COVID-19 pandemic, debt stress, and currency depreciation. Climate disasters, COVID-19, and the invasion of Ukraine are cited as the most significant factors exacerbating the situation.
Farah Kabir, Country Director of ActionAid Bangladesh, highlights the far-reaching impact of fuel price instability on various sectors, especially food, which disproportionately affects women and marginalized communities. Kabir points out that the inflation rate of 9.5% reported by Bangladesh Bank does not reflect the harsh reality faced by marginalized communities, who now have to pay nearly double the previous prices for essential food items like rice and eggs. This has led to a significant decline in food consumption, adversely affecting community nutrition. Moreover, the high fuel prices have strained foreign reserves and national expenditure due to the energy sector’s heavy dependence on fossil fuels.
ActionAid advocates for a comprehensive approach and adequate funding to address the interconnected crises exacerbating the price crisis. These include climate change, debt stress, and the profound repercussions of the Russian invasion in Ukraine. Urgent adjustments to social protection measures are needed to match the current needs of the community. Encouraging families with children to prioritize and continue education is one recommended measure. Dependency on food imports should be addressed through increased investment in agroecology farming. A just transition to renewable energy and agroecological farming practices is crucial for community resilience against shocks and the climate crisis.
The perception-based survey conducted by ActionAid involved 1,010 community members in 69 communities across the 14 surveyed countries. Women constituted 63% of the respondents. The participants were asked about the current prices of various essential commodities compared to pre-crisis levels, and the impact of these price rises on their lives and communities. The countries included in the survey were Afghanistan, Bangladesh, the Democratic Republic of Congo (DRC), Ethiopia
The Bangladesh government has allocated Tk 385 billion for agricultural development over the next three years, aiming for an average annual growth of 10% in the sector by the 2025-26 fiscal year. This investment underscores agriculture’s crucial role in ensuring food security and driving equitable economic growth, according to the ‘Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26)’.
Despite its declining share in GDP, agriculture remains vital for the livelihoods of the majority, especially in rural areas. To enhance food production and resilience against challenges, the government’s strategy includes developing high-yield and adversity-tolerant crop varieties, expanding mechanization and irrigation, and improving access to affordable inputs such as seeds and fertilizers.
The policy document highlights various initiatives aimed at modernizing agriculture through technology. These include prioritizing surface water over groundwater for irrigation to conserve resources, integrating renewable energy solutions, and utilizing remote sensing for crop monitoring.
The government continues to support the sector through subsidies, financial incentives, and technological innovations to establish a sustainable and self-reliant agricultural framework.
The fisheries and livestock sub-sectors also make significant contributions, accounting for 2.53% and 1.91% of GDP, respectively, while providing essential protein sources and livelihoods for over 12% of the population. Achievements in these areas include achieving self-sufficiency in fish, meat, and egg production, with milk production expected to follow suit. Moreover, these sectors play a crucial role in foreign exchange earnings through exports.
Looking ahead, the Ministry of Livestock and Fisheries plans to launch development projects to enhance production capacities, adopt advanced management technologies, and improve conservation efforts, particularly for young hilsa fish (‘jatka’).
Water resource management is another focal point, given its importance for sustainable agriculture. Initiatives are underway to improve surface water availability by excavating water bodies and enhancing coastal afforestation to secure equitable water shares from transboundary rivers.
With climate change posing significant economic risks, projected to reduce GDP by 6.8% by 2030, the government has prioritized comprehensive strategies to mitigate these impacts. The Mujib Climate Prosperity Plan aims to equip vulnerable sectors and communities with tools to enhance resilience and stability against climate-related disruptions.
Through these multifaceted efforts, Bangladesh is taking decisive steps to safeguard and advance its agricultural heritage amidst evolving global challenges.
The International Finance Corporation (IFC) is investing US$30 million in Pran Dairy Limited (PDL) and Habiganj Agro Limited (HAL), both part of the PRAN Group, a leading player in the food and beverage industry (F&B) in Bangladesh. This investment aims to support severely impacted businesses, particularly those reliant on imports for raw materials. The goal is to enhance the resilience of the food processing market, create jobs, foster gender diversity, and strengthen the economy.
This marks the first time IFC’s USD term loans will be utilized for working capital purposes in Bangladesh. These funds will enable PDL and HAL to sustain their operations, increase exports, and preserve over 30,000 jobs, as stated in a press release today. Additionally, IFC will assist PRAN Group in enhancing women’s participation and inclusion in the workplace through relevant policies and practices. The F&B sector plays a crucial role in Bangladesh’s economy, accounting for about 13 percent of manufacturing production value and employing 19 percent of the industrial manufacturing workforce, with a projected compound annual growth rate of 12 percent.
However, challenges such as foreign exchange shortages, high energy prices, and power shortages have disrupted the import of raw materials and constrained local commercial banks’ lending capacity. In response, IFC’s longer-term US dollar financing aims to improve access to foreign exchange, helping Bangladeshi companies navigate the crisis.
Uzma Chowdhury, director (Finance) of PRAN-RFL Group, emphasized the importance of regular access to US dollars for a net importer like PRAN Group. Given the current shortage, accessing USD funds for working capital has been challenging. IFC’s provision of scarcely available US dollar working capital will ensure the long-term stability of the company’s operations and contribute to the country’s economic stability.
As part of its advisory services, IFC will also support PRAN Group in developing the company’s smallholder sourcing supply chain in Bangladesh and identifying opportunities to decarbonize its agro-processing operations, among other initiatives.
Martin Holtmann, IFC country manager for Bangladesh, Bhutan, and Nepal, reiterated IFC’s commitment to supporting clients during crises. He stated that IFC’s financing aims to alleviate the lack of access to foreign exchange while promoting private sector growth in Bangladesh. This investment is expected to enhance food security, prioritize support for strategically important industries, diversify Bangladesh’s export base, create jobs, expand market opportunities, and enhance economic resilience.
Since 2010, IFC has invested over US$3.8 billion to help the private sector grow in Bangladesh.
The mango formation process is progressing smoothly in Rajshahi and Chapainawabganj districts, signaling the imminent arrival of the beloved juicy fruit within the next couple of months, thanks to favorable climatic conditions.
Fruit setting is advancing well, with many mango trees already displaying visually appealing appearances in orchards, gardens, and homestead areas.
The Department of Agriculture Extension (DAE) reports abundant buds in the new mango orchards of Naogaon this year, although fewer buds have appeared on the larger trees in Rajshahi and Chapainawabganj. Mango cultivation spans across 93 thousand hectares of land in Naogaon, Rajshahi, and Chapainawabganj.
According to DAE Additional Director Mahmudul Faruque, over 50 percent of the buds have transitioned into pods in the region. In Rajshahi, 65 percent of mango buds are currently pea-sized, while 35 percent are marble-sized.
Dr. Shafiqul Islam, principal scientific officer of the Fruit Research Station, attributes the reduced bud count this year to last year’s bumper crop, resulting in less food storage in the trees. However, this decline in production is expected to yield larger mangoes of superior quality.
He notes a delayed appearance of buds on trees due to an extended winter, with buds emerging later than usual, primarily in late February.
An irregular distribution of buds is also observed, with some trees exhibiting full coverage while neighboring trees remain bare, with only new leaves emerging. This pattern extends to individual trees, where one branch may be adorned with buds while others remain barren.
Mango grower Shafiqul Islam Sana expresses disappointment as fewer buds have appeared on trees compared to last year, attributing some bud loss to hailstorms. Despite this setback, he remains hopeful for a fruitful harvest.
Upazila Agriculture Officer Shafiullah Sultan highlights the potential for better quality mangoes if at least 20 percent of the pea-sized pods survive, emphasizing the importance of proper orchard care and pest control.
Similar conditions are reported in Charghat upazila, where farmers observe leaves but few mango pods on their trees. Despite challenges, proactive measures such as pesticide spraying are being undertaken to ensure successful mango production.
With a proactive approach, mango grower Abdur Razzak is diligently caring for his trees, noting pod appearances on a significant portion of his orchard.
Yadul Islam, who rents mango trees within the field of Bangladesh Council of Scientific and Industrial Research, reports good bud formation this year, expressing optimism about meeting mango production targets with proper care and management despite natural challenges.
