Farmers hopeful of drop in fertiliser prices

…as Dangote’s $2bn plant joins Notore, Indorama June

Dangote Group is set to commence production at its $2 billion fertilizer plant located in Lekki industrial area of Lagos, in June this year.

Alhaji Aliko Dangote, president of the group, made the revelation in an interview at the World Economic Forum (WEF) in Davos, Switzerland.

The three million tons per annum production capacity is expected to drag down the huge cost of fertilizer not only in the country but across the entire West African markets.

“We are confident that the production will commence in June at the fertilizer plant and we cannot wait to get the plant working,” he stated.

The plant, which has the capacity of producing 8,000 tonnes of urea daily (one of the largest single fertiliser complex in the world), will add to the other two giant fertilizer companies (Notore and Indorama) already in production in Nigeria.

Indorama Fertiliser and Chemical Limited produces 1.5 million MT of urea fertilizer per annum, at a capacity of 4,000MT per day, according to its Head of Agronomy, Dr Balbir Singh. Notore has a production capacity of 0.5 million metric tonnes of urea fertilizer.

Despite this, farmers’ access to fertiliser has remained a huge challenge on a yearly basis in the country.

Late arrival of fertiliser in the market, high cost of the commodity and availability of NPK and other brands are huge challenge for farmers in the country. In addition the two big fertiliser companies pay more attention to urea production.

The general belief among farmers in the country is that the arrival of Dangote’s plant will help address most of these problems.

Head of Marketing at Indorama, Mr Surendra Srivastava, disclosed that the company, which commenced production in June 2016, has supplied over 250, 000MT by the end of January 2017 to farmers in the 36 states of the federation.

“Our total production exceeds the country’s demand for urea fertiliser, so first we satisfy local demand. Nigeria consumes 30% of our production, 70% is exported to other countries like South Africa, Brazil and Argentina,” Mr. Srivastava said.

At Notore, Dr Innocent Okuku, Head, Marketing Services, told Daily Trust that the company has a production capacity of 0.5 million metric tonnes of urea fertilizer.

Although Notore also has the capacity to produce 500,000 metric tonnes of NPK, it produces that only when there is demand locally for it, Okuku stated.

These three fertilizer plants will bring Nigeria’s production capacity for Urea fertilizer to five million metric tonnes per annum, which the Nigerian market cannot absorb.

However, these companies do not pay much attention to the production of NPK fertiliser, which is also in high demand by local consumers.

Nigeria had two big fertiliser production plants: Federal Superphosphate Fertilizer Company (FSFC) set up in 1976 and the National Fertilizer Company of Nigeria (NAFCON) set up in 1988 to produce 1 million tonnes of urea per year. The two companies have since collapsed due to poor management.

However, the Federal Government sold them to private entrepreneurs after several attempts to revive them failed.

In 2017, however, government entere into an arrangement with its Moroccan counterpart for the supply of phosphate for the production of 1million tonnes of NPK.

That arrangement is now leading to resuscitate of some 30 fertilizer and blending companies that were established but went moribund across the states.

There are several other private companies blending different kinds of NPK’s(e.g.GoldenFertilizersandTAKAgro,

Springfield Agro Ltd, etc.)

Apart from urea and phosphate compound fertilizer, there is NPK compound fertilizer and other fertilizer blends such as the triple 15-15-15, 20-1010, 10-20-10, designed for different crop needs.

A look at the Nigerian fertilizer consumption trend over decades shows that the demand for NPK, urea and other fertilizers is on the increase.

The Fertilizer Suppliers Association of Nigeria (FEPSAN), in collaboration with the Federal Fertilizer Department (FFD), Federal Ministry of Agriculture and Rural Development, in a study of fertilizer consumption by crops, gave figures that showed that “potential national consumption of nitrogen for various crops in Nigeria is as follows: 2,198,968MT of nitrogen; 1,415,740MT of phosphorus; and 1,276,880MT of potassium with the potential for NPK at 4,891,580.”

Similarly, AfricaFertiliser and USAID fertilizer statistics overview for Nigeria (2013-2016) released in 2017 showed that NPK was the most imported fertilizer into the country, accounting for 64% of total imports.

It showed that fertilizer import for 2016 (593,994MT) was a 42.11% increase from 2015 (417,976MT).

On fertilizer usage, “Nigeria consumes an average of 12 – 15kg of nutrient per hectare which is far below the 100kg nutrient per hectare world average. The per unit fertilizer rates are far below what should be obtained in developed agricultural systems,” the FEPSAN/FFD study said.