Overall market risk: In West African nations, the current scenario of fertilizer pricing reflects a decrease in demand due to the ongoing dry season in most regions. Consequently, fertilizer prices display diverse trends across various geographical areas. Challenges associated with currency devaluation have resulted in local currency price increases for newly stocked commodities, whereas countries with older stock are experiencing more stable pricing patterns. This varied trend is anticipated to persist, aligning with macroeconomic factors, global price trends, and the introduction of new fertilizer supplies to the region.
Importantly, there are no substantial reports of fertilizer shortages, and fertilizers remain accessible in the majority of countries in this reviewed region. Even in countries facing challenges such as conflict, as seen in Niger, adaptations to the situation, including managing border closures, are underway. The development of “emerging” road channels from Nigeria is playing a role in mitigating complete availability breakdowns. Additionally, there is unrestricted movement and supply of fertilizers across borders in this region.
Cote d’Ivoire: Fertilizer imports for the current year have surged to a record-breaking 700,000 tons, double the previous year’s total and well beyond the estimated annual demand of 350,000 tons. Despite a brief dip in August and September, imports rebounded, exceeding 60,000 tons in October and reaching over 70,000 tons by mid-December. Major importers, anticipating increased demand, have amassed substantial inventories, closely monitoring global price trends. Although sales are slow due to reduced demand post-harvest, major importers maintain ample reserves for the next three months. Despite the stable fertilizer prices between November and December, there has been a decrease in average prices compared to October.
Ghana: As the year concludes in December, there is a noticeable reduction in agricultural activities across the country. Fertilizer imports have experienced a significant decline, with a 60% reduction in the first half of 2023 compared to the previous year, and a further drop in the latter half, resulting in an overall 68% decrease for the entire year. This decline is primarily attributed to the discontinuation of fertilizer subsidies as part of the Planting for Food and Jobs (PFJ) phase I initiative. Notably, Parliament has approved an $800 million loan for the Ghana Cocoa Board (COCOBOD) to procure 47% of the anticipated 850,000 metric tons of cocoa beans from farmers in the upcoming 2023/2024 season.
Nigeria: During the ongoing nationwide dry season, there is currently a low demand and utilization of fertilizer. However, agrodealers foresee an imminent increase in demand as farmers gear up for dry season farming. It’s noteworthy that dry-season farming involves a minority of farmers, constituting less than 10% nationwide, with the majority engaged in rain-fed agriculture. The focal point for heightened demand and supply during this period is expected to be in the northern region, where dry-season farming is more prevalent. Anticipating a surge in demand for dry season farming in the upcoming months, there is a potential for price increases driven by increased demand. Presently, fertilizer prices in the market remain relatively stable due to limited demand from farmers across the country. Fertilizers are adequately available in the market, with some blenders continuing production to build up stock for the approaching season.
Senegal: In December, the country continued to successfully navigate potential fertilizer supply challenges, maintaining resilience through effective preparation for the agricultural season. Adequate production and imports ensured a robust response to increased demand from the fertilizer subsidy program, with the government supplying over 180,500 tons of fertilizer. This proactive approach prevented shortages, met farmers’ needs, and upheld market stability.
Regionally, dynamics between supply and demand varied, with decreased fertilizer demand in rain-fed regions like the Groundnut Basin and Casamance due to the conclusion of the rainy season. Large suppliers concluded distribution farming season, and temporary stores shifted focus to other activities. However, demand remained strong in market gardening areas for urea, NPK 15-10-10, and NPK 10-10-20, while the start of the irrigated rice season in the Valley revived demand for DAP. Despite these fluctuations, measures implemented at the beginning of the season ensured sufficient fertilizer availability and relative price stability.
In Togo, Between November and December, there was a notable decrease in fertilizer demand in the market, primarily attributed to the conclusion of the rainy season nationwide and the transition to the dry season. Currently, most regions are engaged in the harvest and post-harvest phases. However, in the southern region, off-season crops, particularly focused on vegetable cultivation and irrigated rice production, continue to drive fertilizer demand. Despite this localized recovery in demand, the market remains stable due to an ample supply.
To ensure consistent availability throughout the crop year, the government, under its subsidy program, has significantly increased orders, mobilizing a total volume of 151,308 tons, surpassing the annual forecast of 85,000 tons. This surplus, including 58,808 tons of urea and 92,500 tons of NPK 15-15-15, is strategically distributed across the country, benefiting from a widespread subsidy of 42% of the cost price for the entire quantity available.
Availability and Affordability: Overall, the fertilizer markets in West Africa display a varied price outlook across most retail markets. Currency devaluation has contributed to a marginal rise in local currency prices, particularly for recently imported products, while markets with existing stock have maintained more stable outlooks. While affordability concerns linger in specific countries, there is a widespread assurance of availability, and no significant reports of severe shortages have surfaced. This mixed price trend is anticipated to persist into the new year.
Distribution: In West Africa, fertilizer distribution has largely normalized, indicating a positive shift as the effects of the Russia-Ukraine conflict lessen. Most fertilizer ports and border crossings are operational, signaling improved conditions. However, challenges persist in Nigeria’s northeastern region due to security concerns, and Niger faces import sanctions after a coup, complicating distribution efforts. Despite these challenges, landlocked nations like Mali and Burkina Faso have demonstrated resilience by utilizing ports in Cote d’Ivoire for fertilizer imports, ensuring a steady supply. This adaptability underscores the agricultural sector’s resourcefulness in overcoming obstacles. The stabilization of distribution channels in the region offers a promising outlook for agricultural resilience and sustainable growth. Despite localized challenges, the overall projections indicate stability and continuity in the crucial fertilizer supply chain across West Africa.