Overall market risk: In August 2024, West Africa’s agricultural sector faced significant challenges due to extreme weather conditions and fluctuating fertilizer markets. Heavy rainfall and flooding in countries like Nigeria and Niger caused widespread crop damage, while other regions struggled with droughts, leading to water shortages. These unpredictable weather patterns, exacerbated by climate change, underscored the urgent need for improved climate resilience in agriculture to safeguard food security. Simultaneously, the fertilizer market across West Africa experienced stable yet high prices driven by increased demand during the planting season. Côte d’Ivoire managed to stabilize prices by stockpiling fertilizers, keeping costs around $42 (CFA 25.000) per 50 kg bag. However, affordability issues plagued countries like Ghana and Nigeria, where currency depreciation and fluctuating exchange rates added financial pressure on farmers. In Liberia, the rainy season boosted fertilizer demand, but prices fell as dealers cleared old stock, while Togo maintained a strong supply, though demand remained unexpectedly low. Despite government interventions, high fertilizer costs continued to burden smallholder farmers across the region. Overall, fertilizer supply has been adequate to meet the rising demand, and to ensure that agricultural activities can continue uninterrupted.

Benin: In August, agricultural activities are progressing well across the country. The government has allocated over 24 billion CFA to subsidize fertilizers, allowing farmers to purchase a 50 kg bag of Urea for $25 (15,000 CFA) and NPK for $28 (17,000 CFA), compared to $33 (19,500 CFA) and $38 (22,500 CFA) on the open market. To combat the illegal export of subsidized fertilizers, authorities have implemented measures, including border law enforcement to arrest and prosecute violators.

Cote d’Ivoire: In August, the fertilizer market remained stable in West Africa, with major importers bringing in nearly 400,000 MT of fertilizer by mid-year. Despite an increase in demand over the past two months, the market experienced no shortages. Fertilizer prices reflected this stability, with Urea priced at about $35 per 50 kg bag, and NPK fertilizers ranging from $33 to $37. For cotton, fertilizer prices were consistent with the previous year, with Urea at $28 and NPK at $30 per 50 kg bag.

Gambia: Over the past three years, agricultural output in The Gambia has steadily increased due to favorable rainfall, the availability of highly subsidized fertilizers, and affordable high-yield seeds. Free agricultural extension services have also played a crucial role in enhancing productivity. In August 2024, fertilizer distribution faced temporary shortages in some regions due to supply being restricted to agents who fulfilled previous agreements, though these issues were gradually resolved. Fertilizer prices remained stable at GMD 1,100 per 50 kg bag, significantly lower than prices across the border, leading to smuggling. The Gambian government’s interventions aim to support vulnerable farmers and ensure food security, though economic challenges still affect fertilizer affordability in rural areas.

Ghana: Fertilizer prices have remained stable over the past two months, with ample stock available among importers and distributors. However, farmers in eight regions are facing significant losses due to a prolonged dry spell, affecting approximately 430,000 farmers and 871,000 hectares of crops, leading to an estimated GHS 3.5 million in losses. To alleviate financial pressures, the government plans to integrate input grants like fertilizers and seeds with the Planting for Food and Jobs (PFJ) input-credit system. As of August 2024, the prices for Urea, Ammonium Sulphate, and NPK 23-10-5 have remained unchanged since June, at GHS 420.77, GHS 288.00, and GHS 450.71 per 50 kg bag, respectively.

Liberia: In August, heavy rainfall in Liberia significantly disrupted farming activities, leading to increased demand for agro-inputs like fertilizers and soil amendments. Prices for these inputs rose by $5 to $10 per 50kg bag, largely due to higher transportation costs caused by deteriorating roads. Although the government maintains duty-free status on agricultural materials, the absence of direct subsidies has made fertilizers less affordable for farmers, despite their importance for crop yields. Programs like STAR-P and RETRAP are helping some farmers access these inputs. Fertilizers, primarily NPK 15-15-15 and Urea, are mainly imported from neighboring countries and are sold for around $55 per 50kg bag. Transactions are commonly conducted in U.S. dollars, with the exchange rate stable at 1 USD to 194 Liberian dollars.

Nigeria: In August, Nigeria’s active farming season, driven by favorable rainy weather, boosted the cultivation of food and cash crops nationwide, increasing demand for Urea and NPK fertilizers. This demand led to higher supply and sales for agrodealers, supported by government-subsidized fertilizers, making them more accessible to farmers across various States. Recent fertilizer imports have ensured sufficient availability, though prices saw a slight increase due to sustained demand and higher transportation costs amid fuel scarcity. Urea prices rose from ₦29,500 to ₦31,000 per 50 kg bag, with retail prices of NPK 15-15-15 and NPK 20-10-10 also experiencing modest increases, influenced by the rising exchange rate of ₦1,588 per USD in August.

Senegal: In August 2024, the fertilizer market was heavily influenced by substantial subsidies amounting to CFA 120 billion for the 2024-2025 season. In Senegal, where the government is the primary buyer, ensuring smooth distribution is crucial for private sector involvement. Currently, about 75% of fertilizers is in place, with expectations of reaching 90% by early September due to coordinated efforts. Subsidized fertilizer prices remain regulated, with NPK fertilizers ranging from CFA 6,500 to CFA 12,500 and Urea at CFA 10,000, while organic fertilizers are priced between CFA 1,000 and CFA 1,500. On the open market, Urea prices have decreased by 13.19% to an average of CFA 15,625, and NPK fertilizers vary from CFA 15,000 to CFA 45,000, with various sulphates available from CFA 10,125 to CFA 70,000 for 25 kg bags.

Sierra Leone: The peak of the rainy season brought heavy rains, causing floods and landslides, yet farming activities, including weeding and fertilizer application, continued. Fertilizer demand was strong, particularly among rice farmers, and was expected to remain high throughout August. The government distributed 30,000 bags of fertilizer nationwide, which could affect market prices. Despite high availability, fertilizer prices varied across regions, with the Northern Province generally seeing lower prices compared to the Western Area. Price fluctuations were influenced by import costs and the impact of government-subsidized fertilizer entering the market.

Togo: The fertilizer market remained stable in August 2024 in Togo, supported by a government subsidy that mobilized 113,596 MT of fertilizer, surpassing the initial forecast of 85,000 MT. By August, 73,889 MT had been delivered to 232 sales points, with 61,267 MT distributed. However, market transactions declined as the main rainy season ended, reducing the demand for fertilizers, especially as most crops reached maturity. Vegetable crops in irrigated areas sustained limited demand, but a continued decline is expected into September due to dry winds in the north affecting crop growth. Subsidized prices for fertilizers remain unchanged, with Urea and NPK 15-15-15 sold at $30 per 50 kg bag, while cotton-specific fertilizers are priced at $23 per bag.

Availability and Affordability: With the rainy season at its peak in some West African countries, the demand for fertilizers has risen, though not as sharply as in previous years. Fertilizers are generally available, but supply is moderate. Some countries are seeing price increases due to high demand. Affordability remains a significant issue across the region, as fluctuating local currencies continue to drive up fertilizer prices.

Distribution: In August, fertilizer importation, transportation, and logistics in West Africa went smoothly with few disruptions or border restrictions. Significant quantities of fertilizers were successfully moved through entry points and distributed. In Nigeria, logistics were mostly efficient, though the Northeast region experienced transportation restrictions due to security issues. The National Port Authority (NPA) was instrumental in ensuring effective logistics and expediting clearance processes for fertilizers across West Africa, provided proper documentation was maintained.

Overall market risk: The East African Association (EAA) reports that the Eastern Africa bloc is leading regional GDP growth, with an impressive average rate of 6.5 percent. Despite this positive outlook, the region faces significant challenges due to rising fiscal pressures, primarily driven by increasing sovereign debts, which are tightening financial conditions and threatening economic stability. In Southern Africa, the situation is worsened by an El Niño-induced drought, which has further strained the economic landscape. According to the Southern African Development Community (SADC), 68 million people in the region are currently facing drought conditions, which have affected crop and livestock production, leading to food shortages since early 2024.

In the fertilizer market, India’s re-entry to secure DAP tonnages is expected to significantly impact prices. Ethiopia has also made an unexpected move by initiating a tender for 1.2 million MT of DAP, which could increase the number of suppliers in the market. As for Urea, trading slowed during the first week of August following India’s purchase of half the usual tonnage in July. However, with the recent closure of India’s tender and an extended delivery window, supply-demand pressures are expected to ease for most producers. Meanwhile, the global potash market remains stable.

Availability and Affordability: Countries in the regions are reporting adequate fertilizer stocks in August. In Eastern areas, farmers are preparing for the short rain season starting in September/October, which may lead to increased imports. In the Southern region, the winter cropping season has just ended even as some countries continue to grapple with severe drought.

In Kenya, traders are gearing up for the short rain-planting season by importing products and increasing domestic distribution. The government on the other hand continues to issue and announce new tenders to ensure a steady supply of fertilizer for its subsidy program during the upcoming short rain season.

Tanzania recently signed an MoU with other key fertilizer industry stakeholders. This agreement aims to establish a Urea fertilizer manufacturing facility with an annual production capacity of 1.3 million MT. The facility will be situated at the Likong’o-Mchinga site in the Lindi region, adjacent to the Indian Ocean, and is anticipated to be completed within 36 months. Once operational, the facility is anticipated to meet Tanzania’s domestic demand of 700,000 MT per year while also producing a surplus for export

In Ethiopia, of the 1.94 million MT of fertilizer purchased by the Ethiopian Agricultural Business Corporation (EABC), 1.82 million MT has arrived at Djibouti and Lamu ports, representing 93.8% of the annual target. Of this, 87% has been transported to central and farmers’ cooperative union warehouses and distributed to farmers as planned by the Ministry of Agriculture. However, ongoing conflicts, particularly in the Amhara region, are causing disruptions and delays in the delivery of agricultural inputs, including fertilizers.

In Rwanda, a positive trend is being observed. About 75% of the annual demand has been secured and fertilizer importation will likely surpass 100,000 MT this year.

An uptick in imports is also being observed in Malawi, even as the country continues to face challenges with forex. About 85,000 MT of Urea and NPK has been supplied whilst 130,000 MT is at the ports of Beira and Nacala.

In Zambia, a consistent supply of D-Compound and Urea is ongoing. The Ministry of Agriculture has invited eligible bidders to participate in the E-Voucher Program to supply fertilizer and other agricultural inputs under FISP for the 2024/25 agricultural season, targeting 739,266 beneficiaries.

Distribution: Most countries in the region are experiencing normal operations at their ports and with in-country transportation. However, Ethiopia is facing challenges in distributing fertilizers and other agricultural inputs due to the ongoing conflict in the Amhara region. According to a report by Cornelder de Moçambique, the Port of Beira saw cargo volumes surge by 122%, reaching a record high of 442,000 MT in July, compared to the same period in July 2023. This significant increase was primarily driven by the growth in imports of clinker and maize for the domestic market, as well as a substantial rise in wheat, equipment, and sulphur imports destined for neighboring countries. Freight costs to East Africa have increased. Month-over-month, rates from the Baltic and the Middle East to East Africa have decreased to $81 per MT and $25 per MT, respectively, while rates to South Africa have dropped to $45 per MT and $23 per MT.

Month: September 2024

West Africa

East Africa and Southern Africa