Sri Lanka Suffered $6.9mn Loss In Fertilizer Deal With China

The fertilizer deal between Sri Lanka and China has caused the island nation’s exchequer a loss of USD 6.9 million as the stock of fertilizer was rejected in December 2021 over reports that it contained harmful bacteria.

Claiming that it is not possible to regain the amount of USD 6.9 million paid for the stock of organic fertiliser manufactured by the Qingdao Seawin Biotech Group Co Ltd in China when Mahindananda Aluthgamage was Minister of Agriculture, current Minister of Agriculture Mahinda Amaraweera said that it should be acknowledged that the country has suffered a loss in this regard, reported Sri Lankan publication The Morning.
The loss was disclosed during a media briefing held on Wednesday, as journalists queried the Minister regarding the said amount paid for the stock of organic fertiliser imported from China.

In response to the query, Amaraweera said, “A payment of USD 6.9 million has been made for the Chinese fertiliser ship. Now, there is no fertiliser, nor money. There is no apparent way to solve this issue either. My first attempt was to see if we can get this amount of money back, but it does not seem to be working. We have to accept the fact that our country has suffered a loss.”

It was recently reported that although the Agriculture Ministry was considering obtaining another type of fertiliser manufactured by the Qingdao Seawin Biotech Group Co Ltd to replace the controversial stock of organic fertiliser containing harmful bacteria that was sent back, the company had not responded favourably.

Speaking to The Morning at the time, Amaraweera said, “Discussions are currently underway between the company concerned, its local representatives, and Ministry officials with regard to the stock of organic fertiliser that was sent back. However, I have been informed that there are some issues with the court order in this regard.

“The company is producing other types of fertilisers that can be used for cultivation in Sri Lanka. I, as the Agriculture Minister, have requested the company to provide such fertilisers in lieu of the returned stock. However, the company does not seem to be interested in it. No final decision has been reached yet. Therefore, further discussions will be held between the relevant parties. Let us see, once those discussions are over,” he added.

It was reported in September last year that the mandatory tests carried out by several local testing agencies including the National Plant Quarantine Service (NPQS) on the organic fertiliser samples from the Qingdao Seawin Biotech Group Co Ltd have failed.

According to the testing agencies, the stock of fertiliser contained harmful microorganisms, pathogens, and diseases harmful to the soil, plants, and humans.

Following the initial tests carried out by the Sri Lanka Standards Institute, the NPQS, and the Sri Lanka Atomic Energy Board on samples that failed, another set of samples were tested and once again confirmed the presence of harmful bacteria, reported The Morning.

Meanwhile, the “Hippo Spirit” vessel which was in Sri Lankan seas for more than three months carrying the controversial fertiliser consignment shipped by Qingdao Seawin Biotech Group Co Ltd left Sri Lanka’s maritime space in December 2021.

With the said ship leaving the Sri Lankan waters, it was reported that the company was to initiate an international arbitration process against Sri Lanka over the issue.

Against this backdrop, the Attorney General was instructed to resolve the dispute on trade terms that can be agreed upon by both parties.

Accordingly, a sum of USD 5 million was deposited by the Chinese company for the supply of organic fertiliser as a security, and another USD 1.9 million was paid by the Lankan authorities to the Qingdao Seawin Biotech Group Co Ltd. (ANI)