Overall market risk: East Africa continues to display strong macroeconomic resilience, supported by stable inflation, moderate monetary easing, and robust growth projections of around 6%. In contrast, Southern Africa presents a mixed picture: while South Africa benefits from low inflation and recent interest rate cuts, its growth has slowed to approximately 1.2%. Meanwhile, economies like Zambia, Malawi, and Zimbabwe remain under pressure from high inflation, currency depreciation, and fiscal constraints. Overall, the continent is seeing a gradual trend of disinflation, allowing room for cautious monetary easing though progress remains uneven across regions.
On the seasonal front, East Africa is entering the critical June–September rainfall period, though the onset has been slow and coupled with above-average temperatures, impacting early planting and delaying rangeland recovery. Southern Africa, now shifting from its summer harvest to winter cropping, has seen mixed climatic conditions some regions are receiving mid-winter rains while others grapple with residual flood damage and patchy moisture. These vulnerabilities are reinforcing the urgency for climate adaptation and resilience strategies in both regions.
In the fertilizer market, nitrogen prices have begun to soften following China’s return to export activity, with Chinese producers now targeting markets like Ethiopia for granular urea. However, by the end of June, urea prices surged due to geopolitical tensions following an attack on Iran. India closed a significant urea tender of 1.5 million tons, adding further pressure. Ethiopia issued new restrictions on its DAP and urea tenders, now limiting bids to top-performing suppliers. Meanwhile, the potash market remains stable.
Availability and Affordability: Overall, no fertilizer shortage has been reported, and countries are reporting adequate stocks to meet the demand. After a prolonged and contested procurement process, the Kenya Tea Development Agency (KTDA) has received clearance to proceed with the purchase of 99,875 MT of NPK 26:5:5 fertilizer. The process had faced multiple delays, including a temporary suspension following a legal petition by SLDR International, delays in awarding the tender, and a pause on importation pending resolution of a legal appeal. Ethiopia has awarded 170K tons of DAP and 260K tons of Urea amidst concerns of delivery.
Distribution: Overall, ports across Africa are operating with minimal disruptions, though South African ports continue to grapple with persistent congestion and labour-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 $68 (15–20 tons), while those to South Africa (40 tons) remained at $57. From the Middle East, freight costs increased slightly, reaching $34 to South Africa(40tons) and $30to the East Coast(15-20 tons).