Soaring fertiliser prices deepen Africa’s food crisis


Evans Luvaga, a maize farmer in Bungoma, western Kenya, has been hit hard by rapidly rising fertiliser prices.

“Previously, we used to get inputs at affordable prices, especially fertiliser, but since the Ukraine war fertiliser has doubled in price,” he said.

Luvaga usually cultivates eight acres of land, but this season has cut down his planted area by half due to the higher costs. “Farmers cannot afford it, that is the reason why the cost of maize production has gone up. And now there is a scarcity of maize, which is a major food crop here.”

The price of nitrogen based fertilisers, which use gas as feedstock and typically provide for up to two-thirds of the nutrients used to grow crops, has risen in line with natural gas prices in the wake of Russia’s invasion of Ukraine. They hit record highs after sanctions on Moscow, a key source of natural gas to Europe which accounts for about 15 per cent of global crop nutrient supplies, reduced their availability.

Growers worldwide have cut fertiliser usage in response to the price rises, which threatens to reduce food production and deepen the global food crisis. Smallholder farmers like Luvaga, in the world’s poorest continent, are likely to be worst hit, say analysts.

Chart shows the dependency on Russian fertiliser imports by African countries such as South Africa, Kenya, Mozambique, Tanzania, Sierra Leone, Congo, Cote d’Ivoire, Mauritania, Ghana and Cameroon. Net importers, 2021 (percent)

African countries typically use less fertiliser compared with other parts of the world but the impact of price rises will be higher, say analysts, because most nations on the continent rely on homegrown food production. Several countries, such as Cameroon, rely on imports of Russian fertilisers.

“For Africa, removing what little fertiliser is traditionally applied has a disproportionate effect on crop production, resulting in food shortfalls that are being compounded by current drought levels,” said Will Osnato, analyst at commodities data and research group Gro Intelligence.

Analysts say the war’s disruption to the supply of key commodities including fertilisers, coming on top of the coronavirus pandemic and droughts in many regions, could cause social unrest on the continent. “The consequences of a looming food crisis may be more pronounced than during the 2007-08 global food crisis and the 2010-11 food price hikes that contributed to the Arab spring,” said McKinsey, the consultants.

In some countries such as Ivory Coast and Cameroon, the price of fertiliser has risen by more than 50 per cent since the February invasion of Ukraine, according to Dutch non-profit organisation IDH, which supports sustainable trade in developing countries.

“There is a huge, huge crisis in food security [in] sub-Saharan Africa,” said Jonas Mva Mva, Africa director at IDH.

Line chart of CRU fertiliser price index (Jan 2006=100) showing fertiliser prices have fallen from the peak but remain at high levels

While most farmers in Ghana would usually have finished a full application of fertiliser to their fields by August, a survey conducted by Farmerline, an African agritech company, showed more than half of the 178 growers questioned had not applied fertiliser to their fields at all this year.

A third of participants in the survey by the company had carried out a partial application of fertiliser, while only a tenth had finished full application.

Gro forecasts the high price of fertilisers will result in a global production loss of about 1.8 per cent of total corn, wheat, rice and soyabean production in the 2022-23 crop year. The losses will vary by region, with African output predicted to fall by as much as 12 per cent.

In Kenya, which relies on exports of agricultural crops including coffee, tea, and flowers, the reduced fertiliser use could decrease crop production by up to 6 per cent, said Gro.

“Higher prices, particularly for fertiliser” will reduce gross domestic product by 0.8 per cent and increase poverty rates in Kenya, putting an estimated 1.4mn additional people below the poverty line, according to a June study by the International Food Policy Research Institute.

Charles Gatere
Charles Gatere produced 3,000kg of Arabica beans last year during the October to December season, but with the fertiliser shortage, he is concerned about his output levels © Andres Schipani/FT

High prices are taking a toll on Africa’s growers who export their crops. Charles Gatere, a Kenyan coffee farmer said he had never seen fertiliser prices this high in his nearly five decades in the profession.

The price “has more than doubled”, Gatere said, from Ks2,800 ($23) a 50kg bag before the war in Ukraine to between Ks6,500 and Ks7,000. Farmers in the area are paid an average of Ks117 for a kilo of coffee, but the rising cost of production, from Ks35 to Ks60 a kilo due to high fertiliser prices, is eating into their margins.

Gatere said he produced 3,000kg of Arabica beans last year during the October to December season, but with the fertiliser shortage, he is concerned about his output levels. “We need fertiliser to boost productivity . . . a hungry tree cannot grow well,” he said.

High energy prices mean fertiliser prices are set to stay high. For the next five months to a year, “we don’t see how [fertiliser] prices can come down”, said John Baffes, senior agricultural economist and head of the commodities unit at the World Bank.

As part of its $1.5bn emergency food production facility approved earlier this year, the African Development Bank will provide fertiliser to 20mn smallholder farmers across the continent over the next four growing seasons.

Bar chart of export value 2020 ($bn) showing world’s top fertiliser exporters

Some fertiliser producers, including Yara of Norway and Morocco’s OCP, have offered discounts to African farmers. OCP said it was donating 180,000 tonnes of fertiliser to smallholders in sub-Saharan countries and supplying another 370,000 tonnes at a discount to help more than 4mn farmers in Africa.

However, even with discounts, the prices are still higher than last year’s levels and are unaffordable for many growers, said IDH’s Mva Mva. “To put it bluntly, farmers’ pockets are empty.”

Farmerline’s co-founder, Alloysius Attah, warned that lower yields would mean higher food prices and rising dependency on imports for food security. “There may not be enough food for everyone,” he said. “It’s more serious now than ever before.”

*This article has been amended to correct the spelling of Evans Luvaga’s surname



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