Month: February 2024

East Africa and Southern Africa

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Overall market risk: Looking into the year, African nations anticipate experiencing modest economic progression though they must navigate a complex landscape of both domestic and international challenges. The UN World Economic Situation and Prospects (WESP) 2024 predicts a slight acceleration in the continent’s economic growth, with an anticipated average GDP increase of around 3.5 percent. However, uncertainties related to debt sustainability, fiscal pressures, and the impact of climate change persist. This projected growth represents a marginal improvement from the 3.3 percent recorded in 2023.

In the fertilizer space, reports from the different countries indicate a more positive outlook, especially for phosphorus and potash fertilizers.  Thanks to lower prices and returning demand from farmers across the continent. Better affordability will mean more applications in 2024. However, the war in the Middle East could affect the supply, not to mention the volatile currency situation across the continent.

Availability and Affordability: Overall, no major fertilizer shortage has been reported in the region with Zimbabwe and Malawi still having some fiscal issues in procuring fertilizers. In East Africa, suppliers are in the process of securing fertilizers ahead of the main planting season starting from February. In Kenya, a donation of 16K tons of Urea was received from the Algerian Government following a G2G agreement. KTDA has also started the procurement process for 97K tons of NPK 26.5.5. In Ethiopia, out of the planned procurement of 2.3 million metric tons, the process for acquiring 1.48 million metric tons of fertilizer has been successfully concluded, which accounts for about 64% of the total estimated requirement for the year 2023-2024. An additional tender was issued at the start of the year with price reduction expectations.  

In Rwanda, Rwanda Fertilizer Company (RFC) which has started the production of fertilizer blends will be among the suppliers of fertilizers this season. In the South, the fertilizer demand is slowly decreasing as they have concluded their main season. In South Africa, significant carryover inventories from the previous season have been reported. This has prompted local buyers to purchase small quantities. This is very likely to impact 2024 imports. Throughout January, both D Compound and Urea in Zambia have remained consistently accessible, experiencing heightened demand as manufacturers and suppliers distribute their inventories nationwide. In Malawi, imports are at their lowest and will continue to be so for the rest of Q1 given that the country is now out of the planting season. The forex volatility is poised to continue presenting challenges to the country for the short-midterm. Import may pick up slightly in Q2 to moderate when the winter cropping season approaches.

Distribution: Normal operations are being observed in most ports and border points. Importation and distribution of fertilizer appear to be relatively unaffected. Importers especially in East Africa are actively positioning their fertilizer products to ensure an ample supply to meet the ongoing demand. According to corporation officials (EABC) in Ethiopia, of the 1.4 million tons of fertilizer that is scheduled for procurement, 576,000 metric tons has arrived at Djibouti port and is currently in transit within the country. Operations on Malawi’s regular trade routes are progressing normally with no incidents. Imports traditionally decrease during Q1 and pressure on the ports eases. In Tanzania, Kwala Dry Port in the coast region is set to commence operations this month which would decongest Dar es Salaam seaport. The port will be able to store transit cargo to neighbouring countries of Burundi, Tanzania, DR Congo etc.

West Africa

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Overall market risk: The dry season in West African nations has caused a decline in demand for fertilizer, leading to varied pricing trends across different regions. While some areas experience stable prices, others face hikes due to currency devaluation affecting recently stocked commodities. Countries with older stock maintain more consistent pricing. This diverse trend is influenced by macroeconomic factors, global price trends, and the introduction of new fertilizer supplies to the region.

Crucially, there are still no substantial reports of fertilizer shortages, and fertilizers remain readily available in most countries within the reviewed region. Even in countries grappling with challenges such as conflict, exemplified by Niger, measures are being implemented to adapt to the situation, including the management of border closures. The establishment of “emerging” road channels originating from Nigeria is contributing to alleviating complete availability breakdowns in Niger. Furthermore, there is unhindered movement and supply of fertilizers across borders in the West African region.

Benin: Between December 2023 and January 2024, the fertilizer market in Benin experienced an overall decline in demand, despite a consistent supply. The specific demand for fertilizers varied by type and region, with a notable high demand for urea in the central and southern areas, contrasting with relatively lower demand in the northern part. This disparity can be attributed to limited agricultural activity during the period, with the north primarily engaged in harvesting cotton and preparing soil for yam and rice crops. Conversely, sustained demand in the central and southern regions was fueled by out-of-season food production and continuous cultivation of vegetables, especially leafy greens.A significant decline in demand for SSP fertilizer was observed nationwide, with stakeholders attributing this trend to its slow-release or insoluble nature, making application more challenging for growers compared to urea and NPK. Although NPKs were available and accessible during the reviewed period, their overall demand remained low across the country due to the agricultural calendar.

Cote d’Ivoire: The fertilizer market in Ivory Coast is abundantly supplied, because of the oversupply recorded in the previous year. Fertilizer prices in January 2024 remains stable due to reduced demand as a result of the ongoing dry season, when farmers are primarily engaged in harvesting and post-harvest operations. Major importers still hold substantial reserves, thanks to the substantial importation of 700,000 tonnes in 2023, significantly surpassing the national annual forecast of 350,000 tonnes. Anticipating a potential increase in demand, major importers are accumulating significant safety stocks, closely monitoring international price trends, and strategically placing their products for the upcoming 2024 crop year. The prospect of re-export, particularly to Burkina Faso, and notably to Mali since the opening of the San-Pedro to Bamako road, serves as an additional motivation.

Ghana: As the nation continues to contend with reduced demand during the ongoing dry season, national-level fertilizer prices remain stable, experiencing minimal fluctuations despite the presence of ample stocks. Despite expressing interest in participating in the second phase of the Planting for Food and Jobs (PFJ) initiative led by the agriculture ministry, fertilizer companies are currently awaiting the announcement of tender awards. The country imported approximately 25,000 metric tons of fertilizer in the final quarter of 2023. The ministry is actively involved in evaluating and awarding tenders for PFJ Phase II to suppliers, and as part of this ongoing process, additional documentation has been requested from the suppliers.

Liberia: Farming in Liberia is notably impacted by seasonal changes in rainfall and sunlight intensity. The demand for fertilizers is particularly high in counties known for high-yield crop production, such as Bong, Nimba, and Lofa, which collectively contribute to 50-60% of the country’s food production. Farm preparation activities extend until February-May/June, preceding the onset of the rainy season. However, nationwide, the demand and sale of fertilizers remain low until the agricultural calendar shifts to the rainy season. The availability of fertilizers among Agro-dealers also remains low until prompted by farmers’ demand, and farmers’ requests to purchase are generally limited during this period.

Niger: As of January 2024, Niger continues to grapple with an unchanged situation marked by ECOWAS sanctions, leading to border closures with neighboring countries like Nigeria, Benin, and Togo. These sanctions, affecting the transportation of fertilizer imports crucial for Nigerien agriculture, have prompted traders to adopt creative strategies. By unloading fertilizers in major border towns and delivering them in smaller quantities through various means of transport, a relative availability of urea, NPK 20-10-10, and NPK 15-15-15 has been maintained. However, DAP remains unavailable in several agricultural areas. The persistence of these challenges emphasizes the urgent need for sustainable solutions to ensure a stable fertilizer supply in Niger, despite the existing sanctions and restrictions.

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 January 2024, much like in December 2023, the dynamic between fertilizer supply and demand varied across production regions. Notably, in regions like the Groundnut Basin and Casamance, there has been little change since the conclusion of the winter season, resulting in a significant decline in fertilizer demand. This decline prompted major suppliers to wrap up their distribution efforts, leading most temporary retailers to halt their operations. However, a minority of retailers still maintain stocks, selling them moderately to active vegetable producers. Conversely, robust demand persists in the market gardening areas of Niayes, particularly for urea, NPK 15-10-10, and NPK 10-10-20. In the Valley, the start of the irrigated rice season has revitalized demand for DAP. In anticipation of these fluctuations, government measures implemented at the season’s outset, providing over 180,500 tonnes of fertilizer, ensure continuous availability throughout the season.

Sierra Leone: In the month under review, the fertilizer market in Sierra Leone has displayed a gradual improvement compared to the preceding month. Major fertilizer importers have reported slightly improved sales in January 2024, witnessing a steady but gradual increase in demand from fertilizer retailers. Despite the typically low fertilizer demand during the dry season, vegetable growers in the Western, Northern, and Eastern provinces continue to show moderate usage.Importers and retailers anticipate a sustained increase in demand as vegetable farmers prepare for dry-season vegetable farming. The Northern and Eastern regions, significant players in the vegetable markets, are expected to drive elevated fertilizer demand, potentially leading to price increases. Presently, fertilizer prices exhibit irregular variations across the country, with the Northern province having more affordable prices than other regions. It’s crucial to note that all mineral fertilizers, including Urea and NPK, are imported into Sierra Leone, and their prices are influenced by import costs. Fertilizers are generally available in all districts, although quantities may vary.

Togo: The beginning of 2024 mirrors the conclusion of 2023, characterized by a notable decline in fertilizer demand despite an ample supply. This decrease in demand is attributed to the transition from the rainy season to the dry season nationwide. During this period, farmers procure limited amounts of fertilizer, focusing primarily on irrigated crops such as vegetables, rice, fresh maize, and groundnuts. On the supply front, the government has increased its orders under the subsidy program to ensure a consistent availability of fertilizer throughout the crop year. Out of the 173,000 tons of fertilizer ordered, 139,048 tons have already been received, comprising 46,798 tons of urea and 92,250 tons of NPK 15-15-15. This government-supported fertilizer stock is accessible across the country, fully catering to the needs of farmers, with a uniform subsidy of 42% of the cost price for the entire available quantity.

Availability and Affordability: In West Africa, the fertilizer markets present a diverse pricing outlook across retail markets. Local currency prices have slightly increased due to currency devaluation, especially for recently imported products, whereas markets with existing stock maintain more stable conditions. Despite affordability concerns in certain countries, there is a general assurance of availability, and there are no significant reports of severe shortages. This mixed price trend is expected to continue into the new year.

Distribution: In West Africa, fertilizer distribution has largely returned to normal, reflecting a positive shift as the impact of the Russia-Ukraine conflict diminishes. Most fertilizer ports and border crossings are now operational, indicating improved conditions. However, challenges persist in Nigeria’s northeastern region due to security concerns, and Niger faces import sanctions following a coup, complicating distribution efforts. Despite these hurdles, landlocked nations like Mali and Burkina Faso have displayed resilience by utilizing ports in Cote d’Ivoire for fertilizer imports, ensuring a consistent supply. This adaptability highlights the agricultural sector’s resourcefulness in overcoming obstacles.

The stabilization of distribution channels in the region presents a promising outlook for agricultural resilience and sustainable growth. Despite localized challenges, overall projections suggest stability and continuity in the crucial fertilizer supply chain across West Africa.