Sri Lanka Suffers Loss of USD 6.9 mn in Chinese Fertilizer Deal

The exchequer of the island nation suffered a loss of USD 6.9 million as a result of the fertiliser deal between Sri Lanka and China, as the fertiliser stock was rejected in December 2021 due to allegations that it contained dangerous bacteria.

Current Minister of Agriculture Mahinda Amaraweera stated that it should be acknowledged that the country has suffered a loss in this regard after asserting that it is impossible to recover the USD 6.9 million paid for the stock of organic fertilizer manufactured by the Qingdao Seawin Biotech Group Co Ltd in China during the tenure of Mahindananda Aluthgamage. This was according to the Sri Lankan publication The Morning'.

The loss was revealed when journalists questioned the Minister about the alleged sum paid for the stock of organic fertilizer imported from China during a media briefing on Wednesday.

"A payment of USD 6.9 million has been made for the Chinese fertiliser ship," Amaraweera responded to the question. "Right now, neither money nor fertilizer exists. This problem also doesn't seem to have a clear solution. I tried to get this money back as soon as possible, but it doesn't seem to be working. We must acknowledge the fact that our nation has lost."

According to recent reports, the Qingdao Seawin Biotech Group Co Ltd had not responded favorably, despite the Agriculture Ministry's consideration of purchasing another type of fertilizer to replace the contentious organic fertilizer that was sent back and contained harmful bacteria.

When asked about the returned stock of organic fertilizer, Amaraweera said, "Discussions are currently underway between the concerned company, its local representatives, and Ministry officials. But according to what I've heard, there are some problems with the court order in this regard."

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

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

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

The "Hippo Spirit" ship, which had spent more than three months in Sri Lankan waters with the contentious fertilizer shipment sent by Qingdao Seawin Biotech Group Co Ltd, left the country's territorial waters in December 2021. 

It was reported that the company would begin an international arbitration process against Sri Lanka over the matter once the aforementioned ship departed the country's territorial waters.

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