(Bloomberg) — Malawi, a landlocked country surrounded by wealthier neighbors, has been facing challenges due to its geography and economic situation. Currently, it is experiencing a crisis worsened by events happening o...
(Bloomberg) — Malawi, a landlocked country surrounded by wealthier neighbors, has been facing challenges due to its geography and economic situation. Currently, it is experiencing a crisis worsened by events happening over 3,000 miles away.
As farmers deal with rising fuel prices and limited access to fertilizer, there are growing concerns about how this will affect crop production globally. Africa, where over half of its 1.3 billion people depend on agriculture, is particularly at risk, along with parts of Asia. Malawi exemplifies the severe threat to food security.
The majority of Malawi's 22 million residents are small-scale farmers. As they prepare for the planting season, transporting fertilizer to rural areas is becoming prohibitively expensive, and availability is uncertain. Global supply chains for fuel and fertilizers are being disrupted by tensions surrounding the Strait of Hormuz due to the conflict involving the US and Israel against Iran.
“My main concern this year is not just the price, but the availability of fertilizer,” said Yashodhan Gharat, the Malawi country director for One Acre Fund, a nonprofit that supports farmers across ten African nations. “Everyone will be looking for fertilizer, but will it even be available for a small market like Malawi? I have my doubts.”
The repercussions of the conflict have prompted the United Nations to alert about rising food prices on a continent already facing potential famines, with governments lacking the means to assist. Africa uses fertilizers less than regions like Europe, which puts its soil at risk of being undernourished, according to Yara International ASA.
Farmers in countries such as Nigeria and Lesotho report that they are reducing their use of fertilizers or limiting the area they can plant. South Africa is anticipating its lowest wheat harvest in 12 years as winter planting starts. In Senegal, some farmers are opting for cheaper alternatives.
“In sub-Saharan Africa, where smallholder farmers use minimal fertilizers, any price increase can significantly reduce their input usage and decrease already low yields,” stated the UN’s Food and Agriculture Organization in a March report. This could lead to “lower harvests, affecting local consumption, and rising food price inflation,” they cautioned.
The price of urea, the most commonly used nitrogen fertilizer, has surged over 90% due to the ongoing blockade of Hormuz. Nearly a third of the world’s urea exports, along with significant amounts of ammonia and phosphate fertilizers, pass through the strait from countries like Qatar, Saudi Arabia, Iran, and the UAE.
Malawi imports about 60% of its nitrogen fertilizers from Gulf nations, making it one of the most fertilizer-reliant countries worldwide, according to the FAO.
With US-Iran relations still strained over the conflict, the reopening of maritime routes seems uncertain. Even if peace is restored, a recovery in fertilizer shipments will be slow due to shipping congestion and time needed for production facilities to restart, according to Ashish Lakhotia from ETG Group. He noted that his company has seen canceled shipments and diverted cargo, while China is limiting its exports to secure its own supplies.
In West Africa, farmers are not only struggling to afford fertilizers as planting season approaches, but some are having difficulty even finding it. Gideon Idika, an agricultural support officer for farmers in Nigeria’s Abia State, expressed concern about this issue.
“Farmers are skipping fertilizers due to their rising costs, which will ultimately lead to a poor harvest,” Idika said. He also oversees a 200-acre palm oil plantation and noted that high prices have led to the emergence of emergency blenders who mix low-quality fertilizers to meet market demand.
In Senegal, farmers near Thies are also lamenting the high prices and lack of good-quality fertilizers. “I couldn’t get quality fertilizer so I’m using what I can afford instead of what I would normally use,” said vegetable grower Ngoaye Diop.
In Ghana, most suppliers are struggling to import fertilizers due to shortages and delays, according to Nana-Aisha Mohammed, regional director for the African Fertilizer and Agribusiness Partnership. “We have a crisis on our hands,” she remarked.
Malawi's situation is pressing, having already faced repeated food shortages from weather-related disasters like droughts and floods in recent years. Nestled between Zambia, Tanzania, and Mozambique, Malawi is considered the world’s poorest country not in conflict.
From October to March, 22% of Malawians faced acute food insecurity, as reported by the Integrated Food Security Phase Classification, a global partnership including UN agencies and the World Bank.
While a better harvest had slightly improved the situation, rising fuel prices and fertilizer scarcity are creating new challenges. Local farming organizations fear they will be last in line for fertilizer shipments from ports in Mozambique and South Africa. In case of shortages, supplies will likely prioritize wealthier buyers who are easier to reach.
Fertilizer producers outside the Gulf are adapting their export strategies, reallocating quantities, and focusing on markets with better payment capacity, according to a recent report by the Africa Network of Agricultural Policy Research Institutes.
For the supplies that do arrive, increasing costs may hinder Malawi's ability to maintain or expand the subsidies provided to local subsistence farmers. The government has been negotiating with creditors over $13 billion in debt since 2022.
Lines for fuel are growing, with prices exceeding $3.50 per liter for diesel and gasoline. The government is using its gold reserves to finance fuel imports and has sought emergency funds from the World Bank.
“It’s alarming to consider that Malawi is one of the poorest nations globally and highly dependent on imports, most of which come by road,” said Grace Jackson from GiveDirectly, a nonprofit that provides cash assistance to those in need. “The food security outlook for Malawi next year is quite dire. We could see millions facing severe hunger levels.”