Overall market risk: In May 2025, East Africa continued to exhibit macroeconomic stability, with easing inflation and stable currencies, driven by strong exports, sound monetary policy, and ongoing reforms. In contrast, Southern Africa faced greater challenges, particularly in Zambia, Malawi, and Zimbabwe, where inflation and currency pressures remain high though South Africa provided some regional stability. Overall, the continent is experiencing gradual disinflation, supported by tightened monetary policy and IMF-backed economic reforms in several vulnerable countries.
In East Africa, the March–May (MAM) rains were erratic and often below average in parts of the Greater Horn. By late May, many areas saw a timely/early cessation, raising risks for yield shortfalls where planting and vegetative stages depended on late-season rains. The 2024/25 main rainy season wound down in May with harvesting underway/starting in many areas; drought impacts from earlier in the season persisted in several countries.
In the fertilizer market, nitrogen market has started to soften a bit notably due to Chinese return to the market. China confirmed resumption of its exports starting June triggering downward pricing. However, there is a cap on the exports which they have placed at 2 million tonnes. Just like Urea, phosphate market is expected to follow the same trend with Chinese announcing 3.5 Million tonnes of phosphates for export. Potash continues to witness upward trend in prices.
Availability and Affordability: In East Africa, May brought marginal improvements but left uneven crop and rangeland recovery, with food insecurity rising significantly in vulnerable zones which received minimal rains. Southern Africa saw a strong season overall, particularly in South Africa, though localized yield declines in drought-hit areas continue to pose risks. Overall, no fertilizer shortage has been reported.
In Kenya, approximately 300,000 tonnes of fertilizer were imported between January and April representing about 40% of the country’s annual consumption and marking a 7% increase compared to the same period last year. This surge reflects modest growing demand and increased usage. KTDA finally announced the bids with popular winners notably missing. The national treasury has also proposed a budget cut on fertilizer subsidy. This is on tonnage but subsidy price will remain the same at KES 2,500.
In the south, demand for potash remains high. The low price of MOP has continued to benefit the importers who have been importing since January.
Distribution: Overall, ports across Africa are operating with minimal disruptions, though South African ports continue to grapple with persistent congestion and labor-related uncertainties, posing risks to import and export flows across the region. Freight costs showed mixed trends in May. Rates from the Baltic to East Africa’s coast declined to $70, while those to South Africa rose to $57. From the Middle East, freight costs increased slightly, reaching $27 to South Africa and $31 to the East Coast.