The export of caustic soda to India has remained suspended for the last three months after New Delhi ruled the chemical will not be allowed to enter the country without the certification from its standards authority.
Three local companies have been exporting the chemical, used mainly in textile, water treatment, pharmaceuticals and food processing industries, to India and other South Asian counties for the last several years.
The exports to India came to a halt on April 3 when the country's Ministry of Chemicals and Fertilizers ordered that caustic soda should conform to the standards set by the Bureau of Indian Standard (BIS).
The chemical should bear the standard mark under a licence from the BIS, said the order.
“Our shipment to India has remained halted since then and we had to slash production,” said Md Manirul Islam, deputy general manager for sales and marketing of Tasnim Chemical Complex Ltd, a concern of Meghna Group of Industries.
“Our production is now on the brink of suspension because of the build-up of stocks.”
Tasnim Chemical Complex had orders for shipping 4,000 tonnes of the chemical worth $27.60 lakh. The company had also received $5.11 lakh in advance payment but it had to return the money to importers since it could not export the product.
“We have the certification from the Bangladesh Standards and Testing Institution (BSTI) and we had been exporting using the certification,” said Islam.
Tasnim Chemical Complex produces 330 tonnes of caustic soda every year to cater domestic consumers.
Bangladesh consumes 1.60 lakh tonnes of caustic soda annually against the production of 1.90 lakh tonnes. The textile industry is the main consumer of the chemical.
Caustic soda is exported mainly to India, Pakistan, Sri Lanka and Nepal, with India accounting for half of the export earnings from the chemical.
“Our exports to India were rising gradually and we took an initiative to ramp up our production capacity in line with the export growth,” said Mohammad Akramuzzaman, chief financial officer of Samuda Chemical Complex Ltd, a concern of Chittagong-based TK Group.
Samuda Chemical Complex had to cancel an order for shipping 500 tonnes of caustic soda from Indian buyers.
Both Tasnim and Samuda have applied to the BIS seeking the licence for standard mark for their caustic soda.
“We are hopeful to get the licence from the BIS,” said Islam, citing that a team is expected to visit Tasnim factory on July 24.
The chemical producers also applied to the commerce ministry of Bangladesh for taking an initiative so that Indian authorities give clearance to locally made caustic soda and hydrogen peroxide based on certification from the BSTI.
Bangladesh's chemical exports increased 40 percent to $28.17 million in 2017-18 from $20.01 million a year ago, according to the Export Promotion Bureau. Caustic soda exports rose nearly four times to $4.67 million.