Global prices of fertiliser slumped by between 42 percent and 58 percent in June 2023, signalling hope of subdued prices of the commodity this year if the local industry reciprocates.
This is contained in a recent Market Intelligence Report published by the Reserve Bank of Malawi (RBM).
The report indicates that the price of Di-ammonium phosphate (DAP) dropped to $454.7 per metric tonne (mt) from $510 per (mt) in May 2023 representing a 10.8 percent.
However, year-on-year, the price fell by 42 percent compared to $783.8 per mt recorded in June 2022.
The price of Urea dropped to $287.5 per mt from $329.3 per mt in May 2023, translating in a 12.7 percent fall, but plummeted by 58 percent compared to $690 per mt recorded in June 2022.
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“This resulted from a decrease in demand from notable international importers. Subsequently, the average DAP price of $533.9 per mt in the second quarter of 2023 was lower than $616.5 per mt in the first quarter as well as $860.1 per mt for second quarter of 2022. The 2023 second quarter urea price of $310.1 per mt was also lower than $371.6 per mt reported in the first quarter of 2023 and $774.2 per mt for 2022,” the report reads.
Fertilizer Association of Malawi spokesperson Mbawaka Phiri said the trend should eventually reflect on the local market.
She was, however, skeptical over an immediate impact on the local market due to the current forex shortage and high Kwacha to Dollar exchange rate.
“Imports are still coming in and thus far we have imported approximately 155,000mt while at this point last year approximately 97,919mt had been imported. The last stock report showed that the association members had approximately 90,000mt of fertiliser in country,” Phiri said.
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Agriculturalist Tamani Nkhono Mvula said reflection of the global trend on the local market is dependent on a number of factors including timing.
“The other factor is speculation because the bar has already been raised as regards fertiliser prices; so, to bring down the prices could be a difficult thing, especially when the supply of the commodity remains low in the country.
“Furthermore, there is a need to consider trends in transportation costs which are vital in determining local prices of fertiliser. With the cyclones and everything, if we had damages to the railway, it means most of it will be transported on road and this could also make the prices higher. However, all things being equal, the global trend should have an effect on the local market,” Mvula said.
Prices of fertiliser on the local market are ranging between K65,000 and K80,000 per 50 kilogramme bag.
