The fertilizer market in Kenya

The liberalization of the Kenya fertilizer market in early 1990’s led to price and marketing controls, import permits, licensing arrangement and quotas being eliminated. Consequently, fertilizer use doubled from 200,000 mt in 1990 to 450,000 mt in 2009. This impressive growth is closely associated with the smallholder farmers. Liberalization also led to an upsurge of private distributors with more than 10 importers, 500 wholesalers and 6,000 retailers entering the market.

Fertilizer consumption and market prices

Fertilizer is mainly applied to food crops such as maize and domestic horticultural crops, and cash crops such as tea, sugarcane and coffee. Usage per/ha has  substantially increased in the high-potential zones of Western Kenya where roughly 87% of small-scale farmers use fertilizer. From 2008 to 2012, the average use of fertilizer was 36.98 kg/ha of arable land.

Avg use of fertilizer (2008-2011)

Source: IFDC

Crop Group Metric Tons ‘,000’
%
Cereals 365.4 75%
Tea 63.0 13%
Horticulture 33.0 7%
Coffee 27.0 6%
Tobacco 0.5 0%
Total 488.8 100%

 

Most farmers (70%) use DAP fertilizer, with the rest using CAN, NPK and Urea respectively. Kenyans use mainly DAP and Urea on cereals and apply CAN and NPK on cash crop. For cereal crops, fertilizer is heavily used during the long rain season (late April- early June).

Percentage of Small-Scale Household Using Fertilizer in 03/04

Source: Tegemeo Institute

Region %
Coastal lowlands 6%
Western Lowlands 8%
Margina Rain Shadow 27%
Eastern Lowlands 46%
Western Transitional 51%
Western Highlands 74%
High Potential Maize Zone 90%
Central Highlands 94%

 

The price of fertilizer is highly volatile as it is affected by outside factors such as energy and raw material prices, growth in demand from emerging markets, biofuel sector in USA and Europe. DAP prices increased from KES 1,500 (per 50 kg packet) in 1990 to KES 2,400 (per 50 kg packet) in 2008, however, with inflation adjustments the prices of DAP fertilizer tend to be decreasing.

The most common supply chain channel is of importers, wholesalers, retailers who then sell to farmers kilograms’ packet of 50, 25, 10, 2, and 1 kg packet is becoming more popular.

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