Sri Lanka suffers $6.9m loss in Chinese fertilizer deal


Sri Lankan Prime Minister Ranil Wickremesinghe

The island nation’s treasury suffered a loss of $6.9 million following the fertilizer deal between Sri Lanka and China, with the stockpile of fertilizer rejected in December 2021 in due to allegations that it contained dangerous bacteria.

Current Agriculture Minister Mahinda Amaraweera said it must be recognized that the country has suffered a loss in this regard after claiming that it is impossible to recover the 6.9 million dollars paid for the stock of organic fertilizer manufactured by the Qingdao Seawin Biotech Group Co Ltd. in China under the tenure of Mahindananda Aluthgamage. This was according to Sri Lankan publication The Morning’.

The loss came to light when reporters asked the minister about the alleged sum paid for the stockpile of organic fertilizer imported from China at a press briefing on Wednesday.

“A payment of $6.9 million has been made for the Chinese fertilizer vessel,” Amaraweera replied when asked. “At the moment there is no money or fertilizer. This problem also does not seem to have a clear solution. I have tried to get this money back as soon as possible, but it does not seem to be working. We must recognize the fact that our nation lost.”

According to recent reports, the Qingdao Seawin Biotech Group Co Ltd had not responded favorably, despite the Ministry of Agriculture’s intention to purchase another type of fertilizer to replace the controversial organic fertilizer that was returned and contained harmful bacteria.

Asked about the return of organic fertilizer stocks, Amaraweera said, “Discussions are currently ongoing between the company concerned, its local representatives and ministry officials. But from what I’ve heard, there are some issues with the court order in that regard.”

In September last year, it was revealed that mandatory testing by a number of regional testing organizations, including the National Plant Quarantine Service (NPQS), on organic fertilizer samples from Qingdao Seawin Biotech Group Co Ltd, had failed.

The test organisms found that the fertilizer stock contained pathogens, diseases and harmful microorganisms that were bad for soil, plants and people.

An additional set of samples have been tested after initial testing by the Sri Lanka Standards Institute, NPQS and the Sri Lanka Atomic Energy Board on samples that failed and again confirmed the presence of harmful bacteria, according to The Morning.

The vessel “Hippo Spirit”, which had spent more than three months in Sri Lankan waters with the disputed cargo of fertilizer sent by Qingdao Seawin Biotech Group Co Ltd, left the country’s territorial waters in December 2021.

It has been reported that the company will initiate an international arbitration process against Sri Lanka over this matter once the aforementioned vessel leaves the country’s territorial waters.

In light of this, the Attorney General was given the mandate to settle the dispute on commercial terms that could be agreed to by both parties. As a result, the Chinese company supplying the organic fertilizer posted USD 5 million as security and USD 1.9 million was paid to Qingdao Seawin Biotech Group Co Ltd by the Sri Lankan government.

First published: August 27, 2022, 08:38 IST


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