Overall market risk: East and Southern Africa recorded mixed economic performance in August. East Africa continued to drive regional growth, with Kenya projecting 5.6% GDP growth, supported by stronger investment flows, while Rwanda maintained robust growth above 7%, underpinned by policy stability. In contrast, Southern Africa lagged, with South Africa’s growth outlook revised down to about 1% due to structural challenges, weak domestic demand, and fiscal pressures. Malawi also cut its 2025 forecast to 3.2%, weighed down by soaring inflation (28.5%), foreign exchange shortages, and high public debt. Overall, regional growth averaged around 3% in 2025, up slightly from 2.5% in 2024.
In the global fertilizer market, urea trading was subdued early in the month, with prices holding steady. However, India’s IPL tender announcement triggered a sharp price spike, which intensified when India swiftly returned to the market seeking an additional 2 million tons. Phosphate demand has remained weak, except in Bangladesh, leading to downward price pressure, while Ma’aden has stayed active in the market. Kenya is currently sourcing products for the September planting season. The potash market has remained relatively stable. On a positive note, Dangote signed an agreement with Ethiopian Investment Holding to build a $2.5 billion urea plant at Gode, with an annual production capacity of 3 million tons.
Availability and Affordability: East Africa experienced widespread above-average rainfall in August. Between August 19–25, heavy precipitation of up to 150 mm was recorded in northern Ethiopia, Eritrea, Djibouti, South Sudan, western Kenya, Rwanda, and northern Tanzania. This rainfall helped ease earlier dry conditions, improving soil moisture and supporting crop and pasture development. In Southern Africa, the region remains in its cool, dry season with limited field activity, though farmers have begun land preparation ahead of the main planting season.
Fertilizer demand in East Africa was subdued in August but is expected to rise in September with the onset of the short rains. In Kenya, fertilizer imports reached about 505,000 MT as of July, equivalent to 67% of the annual requirement. The Kenya Tea Development Agency (KTDA) awarded a tender to Chinese firm Oriele for 99,875 tonnes of NPK 26-5-5 for the 2025/26 season. In Tanzania, the TFRA has called on local firms to submit their annual fertilizer demand, while Ethiopia is finalizing budgets and tonnage projections for its 2025/26 needs. In South Africa, a strong harvest was reported, which may weigh on crop prices. Global urea prices have faced stiff resistance from the South African market, while MAP prices have remained steady.
Distribution: In the southern region, a line up of imports has been observed at Beira port indicating increased trading activities. Freight cost has shown mixed trend from last month. Cost from Baltic to East Africa and South Africa increased slightly to $78/tonne and $65/tonne respectively. While from Middle East to the same dropped to $28/tonne and $25/tonne. From Morocco to East Coast, there was a slight increase to $53 from $51 last month.