Overall market risk: Africa’s inflation outlook for 2025 shows signs of improvement, with projections ranging between 7.2% and 12.6%, down from higher levels in 2024. Despite this overall moderation, countries such as Sudan, South Sudan, Zimbabwe, Nigeria, and Burundi continue to face severe inflationary pressures due to economic instability and structural challenges.
Currency performance remains mixed across the continent. While countries like Kenya, Ghana, Uganda, and South Africa have maintained relative exchange rate stability, others, most notably Zambia, are experiencing significant currency depreciation driven by foreign exchange pressures. In response, many central banks have tightened or maintained interest rates to help anchor inflation expectations and support macroeconomic stability.
In the fertilizer market space, nitrogen prices rose to $400/tonne (FOB). Middle East and Brazil prices also rose to $390/tonne (FOB). Nigeria is also likely to be impacted by US new tariffs. Same scenario is also witnessed in the phosphates market. MOP and other potassic fertilizers are exempted from newly imposed tariffs. Hence the market remains unaffected.
Availability and Affordability: In the East Africa region where the main planting season has begun, the demand and supply of fertilizers is rising. Traders are busy securing and supplying fertilizers for farmers in the region. Ethiopia recently floated a DAP tender. So far, about 600,000 tonnes of DAP has been imported out of the total requirement of 1.27 million tonnes.
In Kenya about 160,000 tonnes of fertilizers has been imported in January and February. This is a 78% increase from last year same period indicating rise in demand and consumption this year. Additional procurement plans can also be observed from Yara and Maaden. The Kenya Tea Development Agency (KTDA) is also in the evaluation process of procuring the NPK fertilizers for tea. In the south region, demand for potash is slowly rising. Buyers are stepping in to secure volumes for the season.
Distribution: Overall, ports are operating normally with minimal disruptions. However, the continued red sea crisis disruptions and the reroute by shippers to Cape of Good Hope has increased transit time and activities at the port raising the costs. Freight costs in March 2025 have increased slightly compared to November 2024. Rates from the Baltic to South Africa now average $45 per tonne, and to the East Coast, $79 per tonne. In comparison, rates from the Middle East to these same destinations are $21 and $25 per tonne respectively.