Organic fertilizer imports strain China-Sri Lanka ties: Report

Colombo [Sri Lanka], October 13 : The diplomatic ties between Sri Lanka and China were strained after a Chinese company mislead Colombo authorities by taking the money and not supplying the fertilizer to the island country, a media report said.
The issue started when a Chinese company sent the consignment without approval from the Sri Lankan side which was later found to be contaminated with "harmful pathogens like Erwinia," Colombo Gazette reported.
The Sri Lankan government rejected an order for organic fertilizer from a Chinese company Qingdao Seawin Biotec Group Co Ltd on the issue of the presence of harmful bacteria but Beijing build its pressure on Colombo to continue with its organic fertilizer project.
In the latest development of the fertilizer import issue, Sri Lanka's Minister of Agriculture had proposed the cabinet approach the Chinese Ambassador to look into the matter and withdraw the unilateral decision obtained by the Qingdao Seawin Biotec Group Co Ltd, Colombo Gazette reported.
The Chinese company, Qingdao Seawin Biotec Group Co Ltd obtained a civil ruling unilaterally from the Shandong Qingdao Intermediate People's Court of China on December 7, 2021, barring charge of its performance security.
The Chinese fertilizer company, Qingdao Seawin Biotech Group, involved in a dispute with Sri Lanka refused to budge and demanded that Sri Lanka respect the spirit of the agreement reached between both parties, reported Daily Mirror.
Sri Lanka's Minister of Agriculture had also asked for the appointment of a Ministerial Sub Committee to submit necessary recommendations to take appropriate steps to resolve the diplomatic issue, according to Colombo Gazette.
Sri Lankan scientists warned that China's organic fertilizer would be an agricultural disaster as the samples were found to be infected with Erwinia. This notorious plant pathogen causes severe post-harvest losses in crops.
Meanwhile, the Chinese company said that its organic fertilizer products fully comply with the contract, and the project is fully qualified to continue.
As Colombo rejected the shipment, the fertilizer stayed in Sri Lanka for nearly three months and then the ship returned to China. After this incident, China blacklisted the People's Bank of Sri Lanka for not honouring its Letter of Credit, reported Colombo Gazette.
The matter reached to High Court and accordingly the People's Bank has provided USD 6.9 million to the Chinese Fertilizer Company in return for a fresh batch of Organic Fertilizer.
The Joint Statement of China and Sri Lanka declared that the return of the ship was due to the absence of an import permit and not because of the presence of microorganisms. To date, the Chinese company has not dispatched the shipment and Sri Lanka has even requested Chemical fertilizer in the absence of organic fertilizer.
Notably, Sri Lanka's sudden decision this April to make a complete shift to organic fertilisers, ban imports of chemical fertilisers, and use domestic bio-fertilisers led to protests by farmers, who complained they didn't have time to make a switch, and soaring food prices.
Meanwhile, Qingdao Seawin Biotech Group said that the project has caused great losses to the company, reported Daily Mirror.
"It is reported that our company has rejected the proposal of providing chemical fertilizer instead of organic fertilizer put forward by the relevant parties of Sri Lanka. We hereby reiterate and explain that our company has indeed rejected the proposal because the bidding project and the subject matter agreed upon in the contract are organic fertilizers instead of chemical fertilizers, and we are not obliged to provide chemical fertilizers. Our company is a professional manufacturer of organic fertilizers and seaweed fertilizers, not a chemical fertilizers manufacturer, and does not have the conditions to produce chemical fertilizers. According to China's current export policy, chemical fertilizers cannot be exported," the company added.
The company reminded the relevant parties in Sri Lanka to respect the spirit of the contract between both sides and learn from the experience of developed countries.
The exchanges between the Lankan and Chinese officials have come at a time when Sri Lanka is suffering from a massive food crisis.