China Asks Sri Lanka to Continue with Organic Fertilizer Project Despite Quality Issues

Following the rejection of an order for organic fertilizer from a Chinese company due to the presence of harmful bacteria, Beijing is pressuring Colombo to continue with its organic fertilizer project. According to the Daily Mirror, the Chinese fertilizer company Qingdao Seawin Biotech Group, which is embroiled in a dispute with Sri Lanka, has refused to budge and has demanded that Sri Lanka respect the spirit of the agreement reached between both parties.

"According to the supplementary agreement reached between our company and the Sri Lankan side in February 2022, both sides will continue with the organic fertilizer project," Song Hai Mei, Group Director of Qingdao Seawin Biotech, said.

After Sri Lanka accused the Chinese company of providing low-quality fertilizer, both parties went to court. Because the samples were found to be infected with Erwinia, Sri Lankan scientists warned that China's organic fertilizer would be an agricultural disaster. This well-known plant pathogen causes significant post-harvest losses in crops.

Furthermore, the fertilizer deal between Sri Lanka and China cost the island nation's exchequer USD 6.9 million because the fertilizer stock was rejected in December 2021 due to reports that it contained harmful bacteria. However, according to the Daily Mirror, both parties later reached a settlement in the Sri Lankan Commercial High Court, and the Chinese company withdrew the lawsuit in China.

"It has been reported that our company returned the Performance Bond in accordance with a Chinese court ruling, which contradicts the facts." "The Performance Bond is automatically invalid after expiration because the relevant parties in Sri Lanka failed to fulfill the commitment of L/C renewal, resulting in the L/C expiring," Song Hai Mei explained.

According to the Chinese company, its organic fertilizer products fully comply with the contract, and the project is fully qualified to proceed. "Since the beginning of 2022, our company has been consistently urging relevant parties in Sri Lanka to promote the project's implementation as soon as possible in accordance with the supplementary agreement reached in February 2022." Unfortunately, we have received no substantial response or positive action from Sri Lanka to date," the Chinese company added.

Notably, Sri Lanka's abrupt decision in April to switch completely to organic fertilizers, ban chemical fertilizer imports, and use domestic bio-fertilizers sparked farmer protests, who claimed they didn't have time to make the switch, and skyrocketing food prices. Meanwhile, Qingdao Seawin Biotech Group stated that the project has resulted in significant losses for the company, according to the Daily Mirror.

"It has been reported that our company has rejected the proposal of the relevant Sri Lankan parties to provide chemical fertilizer instead of organic fertilizer." We would like to reiterate and explain that our company has rejected the proposal because the bidding project and the subject matter agreed upon in the contract are organic fertilizers rather than chemical fertilizers, and we are not required to provide chemical fertilizers. Our company is a professional manufacturer of organic fertilizers and seaweed fertilizers, not a manufacturer of chemical fertilizers, and we do not have the necessary conditions to produce chemical fertilizers. Chemical fertilizers cannot be exported under China's current export policy," the company added.

The company reminded the relevant parties in Sri Lanka to follow the spirit of the contract and learn from the experience of developed countries. The discussions between Lankan and Chinese officials have taken place at a time when Sri Lanka is facing a massive food crisis.