Deputy Minister for Agriculture Hussein Bashe said last Friday that to contain the situation, the ministry will hold on indicative prices that goes in line with the temporary suspension of the bulk procurement system to allow individual traders order the product and put it on market at competitive prices that are affordable to farmers.
He was speaking at a special meeting with fertilizers manufacturers and importers held in Dar es Salaam last Friday on the availability and costs incurred in logistics that has impacted in hiking purchasing prices for the final consumers.
“Fertilizer demand between July and March takes about 75 percent of the whole country’s demand. Annual domestic utilization stands at approximately 570,000 tons just for the top five cash crops and horticulture. However, with consideration of subsistence farmers’ demand, the product’s demand goes beyond 700,000 tons a year:
Fertilizer top its high demand between July and March, a period of high seasonal cultivation activities of both subsistence and large scale farmers,” said Bashe.
The deputy minister called the meeting so that he could be assured of what amount of fertilizer is currently available in their warehouses as the product’s price skyrocketed at the global market due to COVID-19 eruption that has led to hiking purchasing and logistics costs.
The global cost, insurance and freight rates have gone high due to the pandemic. At the local market fertilizers purchasing costs have gone high since 2018 when for example DAP was sold at average of $416 per ton which has topped around $650 last month. Urea price increased from $359 to $560, CAN rose from $274 to $420.
“The ministry is holding talks with the Tanzania Railway Corporation to see how logistics costs can be harmonized on the central and TAZARA lines. The purpose is making sure that farmers are reached with the fertilizers at reasonable costs by eliminating double handling charges to importers and distributors from the port of Dar es Salaam to the final consumers,” he added.
Tanzania Fertilizer Regulatory Authority (TFRA) Managing Director Dr Stephan Ngailo, said that currently there are only 13 local and foreign firms that are officially producing the product which its capacity is yet to meet the required demand.
Dr Ngailo said that from the year 2017 to 2020 the regulatory body has spent 1.6trillion/- in importation of fertilizer. If investments are drawn from both local and abroad the money spent on the latter will be reduced to a reasonable magnitude.
“We are targeting at attracting more firms and businesses to invest in the fertilizer production so that competitiveness is strengthened and as result there will be reasonable prices on the market that are likely to benefit the final consumers,” he said.
TFRA has brought forward this year’s fertilizer importation and supply tenders to July 8 from the previous that was set for June 18.
The intention of the time extension was to attract more participants from local and foreign countries thus boosting competitiveness that will lead to affordable prices for the final consumers.
“Demand for fertilizer has been growing year in year out as of 2017/18 demand for fertilizer stood at 485,000 tons while in 2020/21 stood at 719,051. However, from this demand about 90 percent of it is being imported and the rest being produced locally,” he affirmed.
According to him, in making the mission of increasing fertilizer production a reality, TFRA has invested in a number of initiatives that involves increasing the efficiency of the fertilizer bulk procurement system that caters three approaches.
The approaches are a pre-qualification stage that involves identification of qualified importers who can be featured in the bulk procurement system.
He said the second approach involves consultation of the business community and cooperative unions so that they submit their fertilizer demands and the third process is advertising the tender where the qualified firms are listed at TFRA's database.