A Chinese firm has demanded $8 million from Sri Lanka for “negligence” in testing its fertilizer sample, escalating tensions persisting for weeks since Sri Lankan authorities rejected a “contaminated” consignment from the firm.

Further, Chinese diplomats are scheduled to meet Sri Lankan authorities on Monday [November 8], The Morning newspaper here reported, over the controversy that appears to be straining bilateral ties.

In a Letter of Demand to the National Plant Quarantine Service of Sri Lanka’s Department of Agriculture, the Chinese firm accused authorities of making an “erroneous conclusion” in its test. In October, Sri Lanka barred a Chinese ship carrying organic fertiliser, after the National Plant Quarantine Service tested samples and confirmed presence of “organisms, including certain types of harmful bacteria”.

China has reacted strongly to the development, even banning a top public sector bank in Sri Lanka that held back payment to the company, after a court order restraining it. In a tweet with “clarifications” on behalf of Chinese company Qingdao Seawin, the Chinese Embassy on Sunday said the Ceylon Fertilizer Company, which received the fertiliser sample on July 28, should have tested it before giving the bid, signing the contract and getting the import permit.

The fertilizer row involving the Chinese firm comes months after Sri Lanka abruptly switched to an “organic fertiliser only” policy, widely criticised by farmers and experts as “short-sighted” and “ill-timed”. Soil scientists have warned that the country’s agricuture sector is heading towards a “catastrophe”.