Colombo, Pretr. Tension has arisen between Sri Lanka and China over the organic fertilizer deal.
Considering the Chinese manure as harmful, Sri Lanka canceled the deal and stopped the payment of the Chinese company. In response, China has blacklisted the People’s Bank of the Sri Lankan government, which provides payment guarantees.
Sri Lanka has now started procurement of organic fertilizers from India. Tension in the case escalated when the People’s Bank stopped payment of $4.9 million (Indian Rupees 36.72 crore) to Chinese company Qingdo Siwin Biotech.
The organic manure from the Chinese company was procured by the Sri Lankan state-owned company Ceylon Fertilizers. The matter went to the High Court of Ceylon Fertilizer Commercial Affairs.
The High Court issued an order on October 22, stopping the payment to the sugar company. The Chinese Embassy in Colombo on Friday blacklisted the People’s Bank after the bank stopped payments.
The embassy has said that Chinese companies have suffered huge losses in recent months due to non-compliance with the letter of credit issued by the People’s Bank. The loss of Qingdo Sivin is the latest in this series.
The Chinese embassy has said that the Chinese company has suffered huge economic losses due to the withholding of fertilizer payments. The decision to declare the sent manure as bad is wrong.
In the case, the People’s Bank says that it has stopped payment due to the order of the High Court.
Earlier in the matter, Sri Lankan Prime Minister Mahinda Rajapaksa had summoned the Chinese ambassador and said that the Chinese company sends a ship of good quality fertilizers to Sri Lanka, only then it can be paid.
Amidst this controversy, Sri Lanka has ordered the supply of organic fertilizers to Indian companies. On this order, the Indian company has supplied 31 lakh liters of high quality liquid nano nitrogen fertilizer (manure) to Sri Lanka last week. Soon the rest of the fertilizers will also be supplied.
