Overall market risk: There has been a continuous downward price correction in the international prices of fertilizers. Some countries in West Africa are taking advantage of the low prices to stock up for the season, while others have reduced the quantity they usually purchase YoY. The low price has created sufficient availability in most retail markets across West Africa, AfricaFertilizer is seeing a situation where the landed CFR prices into West Africa are slowly starting to follow the trend. The most important concern however is the insufficient farmer demand across the board, and this might stifle how fast this price correction gets reflected in the retail chain.
Cote d’Ivoire has continued to stock up products with over 100,000 tons of fertilizer imported so far since the beginning of the year. However, sales are still low as retail fertilizer prices are still unaffordable to farmers. FCFA 30,000 is the average amount needed to buy a 50kg bag of fertilizer, an amount that is out of reach for most farmers.
In Ghana, the unaffordability of fertilizers has also triggered low demand on the part of the farmers, hence most of them have been waiting for the governments planting for food and jobs program (PFJ) in order to get quantities of fertilizers for the season. The PFJ’s implementation is expected to cost the government GHS660 million in 2023. This sum represents a 7.5% increase over the GHS614 million spent in 2022. Targeted beneficiaries are anticipated to increase in number in line with the budget for 2023. We expect a decision to be made soon regarding the 2023 iteration as a new Minister for Agriculture assumes office in the coming days as reliably informed.
In Nigeria, the preparation for the elections and the cashless policy has relatively rendered the fertilizer market inactive, as prices have generally remained stable with low demand despite ample availability. There are some indications that the Nigerian fertilizer market could pick up once the entire election process is over, right in time for the farming season preparations.
With low demand for fertilizers in Togo − Given the end of the agricultural season, many farmers are not using fertilizer at this time. However, orders for fertilizer by the government are underway to mobilize stocks of fertilizer to meet the needs of farmers for the 2023-2024 crop year.
Availability and Affordability: Fertilizers have been generally available in West Africa, not because the quantity supplied has increased, but because the quantity demanded has been reducing. Despite the reduction in prices being experienced in the international market, this is yet to be reflected in the local price points as retail prices are still largely unaffordable to the farmers. All through the West Africa region, prices have relatively been stable, with pockets of increases, but there has been no report of shortages, only reports of low demand, and the inability of farmers to purchase their farming requirements owing to the cost of the products and general economic hardship at micro level
Distribution: Despite the continuing crisis in Russia-Ukraine, some semblance of normalcy in fertilizer trade is gradually returning to West Africa with fertilizer distribution improving. Ports and borders are open for fertilizers except the Northeast region of Nigeria which is still restricting fertilizer movement due to insecurity.