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.