Fertiliser prices double in threat to Nigeria’s food security

The price of fertiliser has more than doubled in Nigeria, with dire implications for food security, according to experts.

The average price of a 50kg bag of NPK fertiliser, mostly used by Nigerian smallholder farmers, has surged by 112.5 percent to N17,000 from N8,000 last year, according to BusinessDay checks.

The price of a 50kg bag of urea fertiliser has also jumped by as much as 183 percent to an average of N17,000 from N6,000 last year.

There is a global surge in fertiliser prices, buoyed by the Russia-Ukraine crisis that has cut off shipments from the Black Sea region that accounts for 30 percent of the major grain trade and at least 12 percent of food calories traded.

The surge in the prices of fertiliser, a key input in boosting yield per hectare, is leading to a fresh spike in food prices, adding to worries over food security.

According to experts, high fertiliser prices will translate to higher production costs and eventually into higher food prices, making more people poorer in Africa’s biggest economy as food accounts for about 80 percent of household spending.

“It has implications for food security because fertiliser is a very important input for boosting agricultural productivity. And the moment you start having this kind of increase, it will have a knock-off effect on food prices,” Muda Yusuf, chief executive officer at Centre for the Promotion of Private Enterprise, said.

Yusuf said that food inflation, one of the biggest issues affecting the economy, might get worse as a result of price increases.

Abiodun Olorundenro, operations manager at Aquashoot Limited, said farmers who have big farms may reduce the amount of land they cultivate while subsistence farmers may not use fertiliser, which could result in lower yield per hectare.

“Fertiliser cost in production is about 35-40 percent. And what that means is that bigger farms will cut down to about 50 percent, leading to a reduction in the availability of food which will make consumers pay more,” he added.

Although data from the National Bureau of Statistics shows that food inflation fell to 17.11 percent in February 2022 from 21.79 percent in February 2021, it is still among the highest in the world.

Read also: Nigeria’s 2021 fertiliser imports surge 65%

The high food prices have forced most consumers to reduce their food consumption to cope with the hike in prices.

In July 2021, the World Bank noted that the country’s surging inflation rate pushed seven million Nigerians into poverty.

According to the bank, before inflation started rising steadily, there were 82.9 million poor Nigerians but the number rose to 90.1 million in 2021 and it is projected to reach 95.1 million by 2022.

A 2021 Global Report on Food Crises states that Nigeria is among the six countries in Africa with a worsening food crisis that is placing 13 million Nigerians at risk of falling into acute food insecurity.

With prices of fertilisers and other energy-intensive products rising as a consequence of the conflict, overall input prices are expected to experience a considerable boost, depressing yields and outputs in the 2022/23 crop season, and giving further upside risk to the state of global food security in the coming years, according to a recent document by Food and Agriculture Organisation (FAO) of the United Nations.

Nigeria is one of the countries that depend on fertiliser raw material imports to produce its fertiliser blends. The country has a comparative advantage in nitrogen and limestone but needs to import phosphate, potash, and granular ammonium sulphate.

Data from the International Trade Centre show that the country imported $250.2 million worth of raw materials for various fertiliser blends in 2020 from $38.7 million imported in 2019, reaching a six-year high.

To absorb conflict-induced shocks and remain resilient, FAO recommends countries that depend on food imports from Ukraine and Russia to diversify the sources of their food supplies by relying on other exporting countries, on existing food stocks, or by enhancing the diversity of their domestic production bases.