Low phosphate output likely to trigger fertilizer shortage

4 June 2014 08:21 pm - 0     - {{hitsCtrl.values.hits}}


The major fertilizer manufacturing companies in Sri Lanka are currently facing an acute shortage of rock phosphate, a key ingredient used in the manufacturing of fertilizers for tea, rubber and coconut, the industry sources said.

“Usually, May and June are the fertilizer application period. This time around the weather has been excellent for application of fertilizer due to ample rain. But we cannot meet the demand in the market place due to extreme supply-side constraints with regards to phosphate we are facing at the moment,” the head of a leading fertilizer manufacturer said on grounds of anonymity.

He further said the supply of phosphate has been deteriorating for the past six weeks or so and stressed that the situation has now become acute.
“Fertilizer companies, depending on their production capacities, always keep a buffer stock of phosphate. But due to the extreme supply-side deteriorations, almost all of the buffer stocks have now depleted,” he added.

State-owned Lanka Phosphate Limited is the only company that provides rock phosphate in the country and the company has exclusive mining rights over 450 hectares of land in Eppawala, where a large rock phosphate deposit is located.

It is estimated that Lanka Phosphate Limited meets more than 60 percent of the entire phosphorus fertilizer requirements of the country’s plantation sector. The products of Lanka Phosphate are only sold in the domestic market place.

When inquired, Lanka Phosphate Limited Chairman Jaliya Kulasekera admitted that there is a phosphate shortage due to certain production and supply side constraints but assured that the situation would be rectified within a few days.

“The Chinese-built grinding mill we have installed has broken down and currently we are fixing it. It’s not easy to find the technology and the spare parts required since we are the only people who operate phosphate grinding mills in the country,” Kulasekera said.

He further blamed the third party transport operators who transport rock phosphate from Eppawala to fertilizer manufacturers of engaging in various dubious activities, causing undue supply delays.

“Most of the machinery and building we have are archaic and it is not easy to increase production overnight,” he added.

According to Kulasekera, the current rock phosphate output has dropped to 3000 metric tonnes per month from 5600 metric tonnes.

“Before I came here, the average monthly output was 3500 tonnes,” Kulasekara stressed. Before Kulasekara, Admiral Daya Sandagiri functioned as the Lanka Phosphate Chairman.

Kulasekara also refuted the reports of Lanka Phosphate employees going on strikes and wrecking some of the machinery, which according to some, has caused the shortage.

According to industry sources, large fertilizer manufacturers such as Baur or CIC Holdings require at least 60 to 80 tonnes of phosphate per day, while medium-sized companies may require around 30 to 40 tonnes per day.

“At the moment, we are only getting about 30 tonnes per every three days,” a top official of a large fertilizer manufacturer said.

Most of the fertilizers and ingredients imported for the manufacturing of fertilizers are subsidized by the government. However, this subsidy does not extend to rock phosphate.

“The per tonne cost of phosphate from Eppawala is around Rs.9,000. But if we are to import, the cost would be around Rs.35,000. Therefore, the option of importing phosphate is currently not viable unless the government extends the subsidy to rock phosphate as well,” he said.

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