Chemical fertilizer loaded long beforeimport ban, says Agstar

A consignment of nearly 10,000 MT of Prilled Urea costing USD 3.97 million that arrived in Colombo on board MV Emesa on July 12 when the ban of the import of chemical fertilizer was in force had been loaded (in Indonesia) under approval from the National Fertilizer Secretariat on Mar. 6 (when there was no ban), Agstar PLC, the consignee, said in a Stock Exchange filing on Friday.

Thereafter, in or around Mar. 11, the vessel got stuck in the Malacca Strait due to sudden problems in her main engine plus various other technical issues and was unable to arrive in Sri Lanka on or around Mar. 15 as originally envisaged, it said. Eventually the vessel arrived in Colombo on July 12 when the import ban was in force.

The filing said that Agstar had informed “all authorities” about the situation by their letter of May 10.

It also said that it had taken immediate action to arrest the vessel and claimed losses due to substantial delay in its arrival. It is at present under arrest in the Port of Colombo. Agstar said it had paid all Customs and Ports Authority dues and the vessel berthed for discharge.

“Subsequently Customs detained the vessel and requested the Ministry of Agriculture for confirmation of the gazette notification of May 6 (relating to the ban on the import of chemical fertilizer),” Agstar said.

Its filing further said: “Please note that Import and Export (Control) Regulation No. 7 of 2021 issued on or after May 6 only applies to shipments that have a date in the Bill of Lading after May 6, 2021, (that is loaded on or after May 6). Consequently this Regulation has no bearing whatsoever to the above consignment as it was loaded on the vessel way back on Mar. 6, 2021, which is approximately two months prior to the date in the Regulation,” the Agstar filing said.

It further said it was in discussion with the relevant authorities to get the cargo cleared as Agstar had not violated any regulation.

“Further, the above cargo has been ordered with prior approval of the NFS and (is intended) mainly to meet Nitrogen fertilizer requirement in the tea sector,” the filing said. “The company has already obtained approval of NFS to supply the bulk of this cargo to meet the requirements of plantation companies and tea smallholders.”

Agstar said that in the event permission is not granted (“even with the above clear facts”) to clear the cargo, “the company will be compelled to make necessary arrangements to move the cargo to another destination in order to mitigate colossal losses.

It further said that at the moment it does not envisage any substantial financial impact.