In the midst of a severe food crisis across Africa, the exorbitant cost of imported fertilizers is adding fuel to the fire, exacerbating food insecurity and hampering agricultural production. Recent data from the African Market Observatory reveals that global fertilizer suppliers have enjoyed record-breaking profits, with the top nine producers tripling their earnings in 2022 compared to two years earlier, driven by price spikes resulting from the Russia-Ukraine war.
Africa, in particular, is feeling the brunt of this fertilizer price surge, with super-high profit margins continuing in 2023 for many African countries, despite international prices showing signs of stabilizing. The agricultural harvest season has just concluded in most southern African countries, and farmers find themselves grappling with high input costs that are squeezing their margins and impacting production levels.
The African Market Observatory’s findings highlight a major issue within the supply chain, revealing that excessive margins of 30%-80% are being earned on fertilizer sales to various African nations. In contrast, South Africa benefits from robust competition enforcement, which has led to substantial price reductions. This stark contrast underscores the disadvantage faced by farmers in countries like Malawi and Zambia.
With high fertilizer prices taking a toll on agricultural productivity, food prices continue to surge, and the region witnesses an alarming rise in acute food insecurity. Approximately 73 million people in East and Southern Africa are currently experiencing acute food insecurity, with vulnerable small-holder farmers and low-income urban households bearing the heaviest burdens.
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