Nigeria’s fertilizer imports in 2021 increase by 65%

Nigeria, Africa’s most populous country, saw its fertilizer imports increase by 65% ​​in 2021 as demand for the product increased.

The data of the International Fertilizer Development Center show that the country imported 706,922 metric tons (MT) of fertilizer in 2021, compared to 429,303 MT imported in 2020, mainly diammonium phosphate (DAP), muriate of potash (MOP) and granular ammonium sulphate.

The recent increase in demand for fertilizer raw materials not found locally in the country is an indication that industry activities are increasing sharply to disrupt the status quo of importing blended fertilizers while creating jobs and increasing the productivity of farmers.

Currently, industry capacity utilization is estimated at 80%, with 52 blending plants operating in 2021.

“There is a lot of investment in the fertilizer industry, and this is what is responsible for the recent increase in imports since we are still importing some of the materials needed for production,” said Abiodun Olorundenro, Chief Operating Officer. at Aquashoot Limited.

Nigeria needs four constituent raw materials to produce urea and NPK. It has many urea and limestone granules, but needs to import DAP, MOP and granular ammonium to produce various NPK mixtures.

To ensure a steady supply of DAP, Nigeria unveiled the Presidential Fertilizer Initiative in 2016 to jump-start the country’s local capacity to blend and produce fertilizer.

Under this initiative, the government imports DAP at a discounted commercial price and transports it directly to blenders for blending at a discounted price.

This has attracted many investments in the sector from fertilizer heavyweights such as Indorama, Dangote, Notore and OCP Africa. Investment in the Nigerian fertilizer industry is estimated at $7.5 billion (3.2 trillion naira) by the Fertilizer Producers & Suppliers Association of Nigeria (FEPSAN).

The Nigerian government has completely withdrawn and restructured the industry limiting its role to bulk purchasing of imported raw materials on behalf of the blender to allow market forces to drive the industry.

The industry has been under pressure since the Russian invasion of Ukraine in February. The price of automotive gas oil, popularly known as diesel, used to power their blending plants, has soared almost 170% in one year to reach 700-750 naira per litre, from 220-240 naira in March last year. ‘last year.

The surge in the price of diesel, which has been deregulated, followed the rise in world oil prices, driven by the Russian-Ukrainian crisis. Brent, the global oil benchmark, was selling for $106 a barrel at the time of writing.

Also read: Dangote Fertilizer will train 1 million farmers in 3 years

This is in addition to the lack of supply of potash, a key raw material in the production of various NPK blends, as the war shocked the global raw material market and halted shipments from the sea region. Black.

Four ships bound for Nigeria with over 70,000 tonnes of potash were trapped in the Black Sea region. This has driven NPK prices up 130% since the start of the wet agricultural season.

Russia is the world’s largest fertilizer exporter, accounting for 23% of ammonia, 14% of urea, 10% of processed phosphate and 21% of potash exports, according to data from the Fertilizer Institute.

An industry source who does not want his name printed told BusinessDay that FEPSAN visited the president recently, hopes to access raw materials with the promise that it will not affect their production, which may not not be feasible due to other factors.

According to the source, if the shortage of potash persists, some companies could be forced either to suspend the production of fertilizers, or to reduce the quota produced to reduce their energy costs while the distribution of fertilizers will be strongly impacted, in particular with the rise in insecurity. in the North where food is mainly grown.

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