Overall market risk
East Africa: October and November experienced normal to above-normal rainfall across much of the region. While localized flooding impacted some areas, the rains supported favorable conditions for sowing during the short rains season. However, rainfall forecasts predict the likelihood of depressed rains in December, continuing into the first quarter of 2025. This underscores the importance of bolstering preparedness measures to mitigate potential drought impacts in the coming year.
Southern Africa: As of early November, many areas in the region had yet to experience an effective onset of rainfall, which typically begins in mid-November. Northwestern and southeastern parts of the region, where rainfall usually starts in October, have recorded below-average rainfall, indicating a delayed season. Despite this slow start, planting remained viable until December in many areas. (Source: WFP, SADC)
Global Fertilizer Market: Urea prices began the month on a bearish note, driven by sluggish demand and India’s reported sufficient inventories. Ethiopia’s tender for 800,000 MT was the only significant market driver initially. However, the much-anticipated Indian tender materialized recently, which may trigger increased market activity and potential price adjustments. Similarly, phosphate demand remains low, with Ethiopia’s 600,000-MT tender being a key influence. Additionally, China’s export restrictions, potentially extending into Q1 2025, are expected to impact the phosphate market.
Availability and Affordability: As the year draws to a close, most countries are reporting sufficient fertilizer inventories with no significant shortages. In East Africa, where the short rains season has ended, trading activity remains slow as traders prepare for Q1 imports ahead of the main season in March/April. In Kenya, the government, through the National Cereals and Produce Board, has continued fertilizer procurement in December.
Tanzania reports adequate stocks to meet demand, with over 760,000 MT made available this year. In Ethiopia, the EABC is in the process of procuring 611,000 MT of DAP and 820,000 MT of Urea, with deliveries scheduled between January and June. Meanwhile, in Rwanda, fertilizer suppliers contracted by the government for seasons 2025 A & B, including YARA, ETG, RFC, One Acre Fund, and MGK, are actively distributing fertilizers through the agrodealer network with APTC’s facilitation. No major shortages have been reported in December.
In contrast, Malawi continues to face forex challenges that could lead to fertilizer shortages if not addressed. Currently, the country has 140,000 MT of fertilizer, representing 50% of its consumption needs. South Africa reports sufficient fertilizer inventories, with about 1.5 million MT consumed between January and October. The demand for MOP has risen, with recent shipments arriving from Russia.
Distribution: Most ports and border points are operating normally with minimal disruptions, although activity is slowing down as the festive season approaches. However, ongoing political unrest and demonstrations at Mozambique’s Nacala and Beira ports have disrupted operations, leading to longer turnaround times, delays, and increased costs. These challenges have prompted landlocked countries like Zambia and Malawi to explore alternative ports, such as Dar es Salaam.
Freight costs have seen a slight decrease compared to November. Rates from the Baltic to South Africa and the East Coast are $40 and $18 per MT, respectively, while rates from the Middle East to the same destinations are $19 and $68 per MT.