Month: October 2023

Overall market risk: In Kenya, the ongoing drought is likely to impact the anticipated long rain season which normally starts in March through to May. This is already affecting crop production for the year, increasing the risk of food insecurity and ultimately the country’s economic growth. Additionally, reduced agricultural activities pose a high risk because of low fertilizer consumption as well as increased inflationary pressures. Despite predictions from the meteorology department of depressed rains, traders and importers are seen to be positioning their products for the season. 

Tanzania continues to face depressed fertilizer demand and subsequently use, mainly contributed by the high price of fertilizers. Imposition of taxes and other charges at the port of Dar es Salaam are adding fuel to the fire. Other reasons include additional levies and taxes imposed on the raw materials used in the production of local fertilizers and inadequate credit arrangements to support smallholder farmers to access improved agricultural inputs. 

In Southern Africa, Zambia inflation accelerated to a two-month high in February as non-food price growth quickened, suggesting that underlying price pressures are mounting. A possible reduction in corn output because of adverse weather conditions and infestations of fall armyworms may also fuel inflation this year. South Africa is also battling elevated inflation and rising interest rates, in an environment of extremely low economic growth amid both domestic and international developments. 

Availability and Affordability: Overall, fertilizer availability has improved both in inventory and active trade across the different Eastern and Southern Africa countries. 

In the Eastern Africa region, availability of fertilizers is not really an issue. Importation of the fertilizers for the upcoming application periods continues. YoY, fertilizer prices although still high, continue to soften. In Kenya, fertilizer imports stood at 200K Metric Ton as of February, a 30% improvement YoY. In Tanzania, it is 300K Metric Tons. Uganda has also reported enough inventory to meet the demand. In Rwanda, agrodealers have stocked fertilizers for the short rain season but low farmer demand is being reported. Main reason, is delayed and depressed rains. 

In the Southern Africa region, traders and the FISP program in Zambia are building up stocks of Compound D and Urea fertilizers ahead of the winter season in May. In Mozambique, no shortage has been reported albeit with a  low intake due to high prices. In Malawi, Farmers can still redeem their input requirements under the AIP despite passage of the main application season.  

Distribution: Normal operations have been observed in most ports and across borders in ESA region. Inland, transport of fertilizer is with no hitch. Increased global fuel prices has slightly increased transportation cost. Beira and Nacala in Mozambique and Durban ports are experiencing reduced pressure as the agricultural season draws to a close in Southern Africa. In Mozambique, the raging Tropical cyclone Freddy has resulted in uncounted damage to infrastructure and displacement of people in the southern region. The insurgency in Cabo Delgado province has also resulted in displacement and food shortage in the region.  

Risque global du marché: Un rapport récent du Fonds monétaire international (FMI) indique que les pays africains connaissent une période de resserrement de la demande de devises, associée à une réduction des liquidités sur le marché interbancaire des changes ainsi qu’à une dépréciation de la monnaie locale à la suite de la guerre en Ukraine. Au Kenya, par exemple, après 60 jours de baisse, le shilling kenyan a connu sa plus longue série de pertes depuis le début des archives en 1988. 

Kenya : Après des mois de sécheresse et de chaleur qui ont entraîné la sécheresse, la faim, la perte de vies humaines et la hausse dévastatrice du coût de la vie, les pluies sont enfin arrivées. Dans la plupart des régions du pays, les producteurs sont occupés à planter leurs cultures. Dans les régions du Sud et de l’Ouest, où les producteurs plantent principalement des cultures de base, du maïs et des haricots, une demande accrue d’engrais a été enregistrée, en particulier pour les engrais de base (DAP et mélanges de plantation).  

Zambie, la saison des semis vient de s’achever. Les dépôts de stockage à travers le pays ont été vidés alors que les producteurs se concentrent sur la gestion des récoltes. Le gouvernement a achevé le processus de préparation de l’appel d’offres FISP 2023/24 et l’a lancé au cours de la deuxième semaine de mars 2023.  

Malawi, la période d’épandage d’engrais est maintenant passée, de sorte que l’offre et la demande sont à leur point le plus bas de la saison. La demande devrait augmenter légèrement lorsque le pays entrera dans la saison des cultures d’hiver en mai/juin. Le pays se remet également des inondations massives qui ont touché la plupart de ses régions. 

Afrique du Sud, les activités commerciales dans la ceinture orientale sont calmes, mais l’activité reprend dans la région du Cap, où le marché se dirige vers sa période de pointe pour les cultures d’hiver. 

Abordabilité et disponibilité: Dans l’ensemble, la disponibilité et la demande d’engrais se sont améliorées, tant au niveau des stocks que du commerce actif dans les différents pays d’Afrique de l’Est et d’Afrique australe. 

Dans la région de l’Afrique de l’Est, la disponibilité des engrais n’est pas un problème. L’importation d’engrais pour les prochaines périodes d’application se poursuit. En glissement annuel, les prix des engrais, bien que toujours élevés, continuent de baisser. Au Rwanda, la fourniture d’engrais par Yara, ETG et RFC par l’intermédiaire des réseaux des agrodealers se poursuit normalement. De janvier à ce jour, environ 9.184 tonnes ont été importées, les chiffres des stocks de report étant obscurs. Au Kenya, afin de soutenir et d’aider les producteurs, le gouvernement a mis en place un programme de subvention des engrais dans le cadre duquel il fournit deux sacs de 50 kg par hectar pour les engrais de base et les engrais de couverture. Jusqu’à présent, le programme est mis en œuvre dans 12 comtés et il est prévu de l’étendre à d’autres comtés. Dans le secteur du thé, l’Agence kényane de développement du thé a lancé un appel d’offres pour l’approvisionnement de 92.737 tonnes de composé chimique NPK 26-5-5 pour l’année 2023. En Tanzanie, la situation suggère que 99% des besoins en engrais du pays sont satisfaits au niveau national. En mars, environ 200.000 tonnes d’engrais étaient disponibles dans le pays pour la saison. L’Éthiopie a également fait état d’une offre suffisante pour répondre à la demande. Environ 500.000 tonnes d’engrais sont arrivées au port de Djibouti et ont été distribuées aux unions de coopératives agricoles et aux entrepôts des coopératives primaires (CP). 

Dans la région de l’Afrique australe, le Malawi a fait état d’une demande et d’une offre faibles, car il se trouve dans la période de récolte qui commence en avril/mai 2023. La demande devrait toutefois augmenter à l’approche de la saison des cultures d’hiver qui commence au troisième trimestre. En Afrique du Sud, en général, comme tous les prix mondiaux des engrais sont maintenant inférieurs à ceux de l’année dernière, la demande d’engrais des producteurs devrait rester suffisante pour les cultures d’hiver, en particulier dans la province de Western Cape.  

Distribution: Des opérations normales ont été observées dans la plupart des ports et aux frontières de la région orientale et australe. À l’intérieur des pays, le transport d’engrais se fait sans problème. Les taux de fret et les prix d’expédition devraient se stabiliser progressivement au cours des prochains mois, bien que les importateurs restent sensibles aux retards et à la volatilité des coûts d’expédition. Les ports de Beira et Nacala au Mozambique et de Durban subissent une pression réduite alors que la saison agricole touche à sa fin en Afrique australe. Dar es Salaam et Mombasa, dans la région de l’Est, s’attendent en revanche à une augmentation des activités portuaires à l’approche de la longue saison des pluies.  La distribution intérieure d’engrais dans la région de l’Afrique australe a été affectée car les transporteurs ont dû cesser leurs activités pendant et après le cyclone.  

Overall market risk: As in other parts of the world, the economic deceleration in the region has led to stricter monetary policies, higher living costs, and the appreciation of the dollar against several currencies, according to the International Monetary Fund (IMF). However, the IMF’s recently released World Economic Outlook anticipates that Kenya’s growth rate will increase to 5.3% in 2023, up from the 5.1% forecast in October 2022. The IMF has revised projections for Rwanda, Uganda, Burundi and the Democratic Republic of Congo (DRC) downwards. According to the 2023 Malawi Government Annual Economic Report, the importation of pharmaceuticals, fertilizer and diesel fell in 2022 by 80%, 37% and 30%, respectively. The country is still reeling from the aftereffects of Cyclone Freddy which has worsened the outlook for both inflation and economic activity due to the serious damage caused to crops and infrastructure. 

In the agriculture sector, long rains experienced in different parts of East Africa give a positive outlook on food production. In the southern region, crop harvest is ongoing. Despite the fact that the Covid-19 pandemic and the Ukraine-Russia conflict have subsided, their consequences are still being felt, one being the high and unaffordable prices of fertilizers that are affecting many farmers. The delta between landed prices for fresh stock coming in hasn’t yet been fully reflected in the retail price points with most outlets yet to fully match the new price levels. If the favourable weather currently being experienced continues, farmer demand will continue to draw in fresh imports and eventually a lower price. 

Availability and Affordability: The second quarter has been marked by increased supply and improving uptake of fertilizers in the Eastern Africa region. No major fertilizer shortage has been reported in the region. In Kenya, most farmers are almost done with planting and top-dressing has already begun in other areas.  The national Fertilizer Subsidy that was rolled out by the government has so far released approximately 3 million 50-KG bags (150,000 Mt) to farmers of various fertilizers. The same case is in Uganda where demand for top-dressing fertilizers such as NPK 17-17-17 and CAN is rising as the rains continue. In Mozambique, the areas affected by the cyclone have registered low supply and uptake due to poor infrastructure. The availability of carryover stocks at the agrodealer level from last season is another reason for low supply by the hub dealers. In Zambia, the Ministry of Agriculture has disclosed that 1, 024, 434 farmers will benefit from the Farmer Input Support Program (FISP) during the 2023-2024 agriculture season. Contributions towards the program will remain at K400. The 2023/24 FISP tender received bids in April and is in the process of being evaluated. In Zimbabwe, fertilizer manufacturers and distributors are unwilling and unable to carry sizeable amounts of stock due to high-interest rates for borrowing and due to cash flow constraints arising from the liquidity crunch in the market. There is therefore limited stock available in the retail chains. This will affect the viability of the same and we have already started seeing some stockists and distributors closing shop. In South Africa, it is projected that there will be the odd spike in demand for urea in Q2; the overall supply-demand balance is heavily tilted towards supply. The next Indian tender is unlikely to emerge until mid-Q2 and Europe is showing signs of its seasonal demand downturn already starting. 

Distribution: The region’s ports are operating normally, with an uptick in activity that is gradually easing in the East due to the ongoing cropping season. Fertilizer vessels are already docking at Mombasa and Dar es Salaam ports this month, and more are expected in the coming weeks. In the south, there has been a decline in the importation and transit of fertilizer to neighbouring countries as the harvest season approaches. Inland and cross-border transportation is normal, but high fuel prices is a limiting factor. In areas of Malawi and Mozambique that were affected by Cyclone Freddy, the supply and distribution of commodities including fertilizers is still a major challenge due to poor infrastructure.  

Overall market risk: The economies of East and Southern Africa continue to struggle to maintain and advance inclusive economic growth amidst the shocks at both the international and domestic levels. This has been worsened by elevated inflation rates, high debt distress, as well as shortages of foreign currency. 

The Kenyan economy is facing tough times with the recent implementation of increased taxes outlined in the finance bill of 2023, which was published in late April. These changes could take a toll on the economy which had already been hit hard by a regional drought and the Russia-Ukraine war that sent inflation soaring and GDP growth dipping. In Rwanda, despite the hike in inflation, IMF projects a positive outlook of GDP to grow by 6.2 percent in 2023 and 7.5 percent in 2024 respectively. In Zimbabwe, the unstable and challenging economic situation has resulted in most farmers being hesitant and unable to finance their agricultural operations.  As a result, farmers will have to depend on funding programs. Meanwhile, suppliers face obstacles in augmenting their working capital through bank loans due to exorbitant interest rates. 

Overall, in the fertilizer market space, a positive outlook looms as the prices of fertilizers are slowly coming down in the international market.  

Availability and Affordability: Most countries in the regions are registering adequate fertilizers stocks to meet the 2022/23 demand. In the southern region where the main season is about to start, suppliers and importers are seen to be positioning their products. In most parts of the eastern region, the main planting season concluded, and farmers are currently doing top-dress for their crops. According to the Fertilizer Association of Malawi (FAM), there is an adequate supply of fertilizers in the country, and the stock levels are anticipated to increase further upon the announcement of subsidy tender awards. In Ethiopia, over 500,000 metric tons of fertilizers have arrived at Djibouti port scheduled for the Ethiopian farming seasons. These fertilizers will be distributed to farmers’ cooperative unions (FCUs) and primary cooperatives (PCs) warehouses. In Mozambique, fertilizer demand is currently low as most farmers are in the harvesting season. The agrodealers on the other hand are managing with carryover stocks from the last season. In Kenya, The Kenya Tea and Development Agency (KTDA) has floated a tender for NPK 26-5-5. In South Africa, concerns are arising regarding the inventory levels in the supply chain despite the commencement of the season. About 240K Metric Tons has been imported between January and April 2023. 

Distribution: Most countries are reporting normalcy at the ports and border points. The latest report released by world bank in mid-May 2023 indicated a drop in performance of the port of Mombasa with a rank of 36 out 348 globally. This is attributed to the reduced cargo volume the port cleared in 2022, which was a drop compared to 2021. However, an improvement in cargo handling including fertilizer is expected this year owing to the completion of a second container terminal accommodating at least 450 20 FT containers at a time. In Malawi,  in-country distribution is still affected after the destruction caused by cyclone Freddy. Importers relying on the Beira port corridor face issues of unreliability and unpredictability due to the ongoing inefficiencies caused by factors such as high traffic, prioritization of vessel discharge, and tax-related problems.