IFDC Report, Volume 33, No. 4

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The sudden spike and subsequent collapse of fertilizer prices can be attributed to a convergence of multiple factors, creating a "perfect storm" in the market. This imbalance between supply and rapidly expanding demand, particularly in Asia, played a significant role in driving up prices. The surge in fertilizer demand was driven by various factors such as the production of biofuels in the United States, Brazil, and Europe, increased livestock production, and low grain reserves. Additionally, high tariffs on fertilizer exports imposed by China, weakness of the U.S. dollar, and soaring energy prices further contributed to the price hike. However, a combination of factors, including the global credit market collapse, trade recession, and slowdown in economic growth, led to a decline in fertilizer demand and excess stockpiling. The situation was exacerbated by a shortage of potash due to transportation difficulties. The future outlook suggests that price volatility will persist until new production facilities come online and nitrogen and phosphate prices recover. Furthermore, the introduction of urea tanks on diesel trucks in the United States, starting in 2010, has created a new demand for urea, which could impact fertilizer prices. The increased use of urea for exhaust emission reduction has raised concerns about higher fertilizer prices, while others believe it may stimulate increased production and lower prices. Strategies for higher production and more efficient use of urea, such as deep placement, controlled-release fertilizers, and nitrification inhibitors, are being explored. Initiatives like the Nigeria Agro-Dealer Support project aim to improve farmer access to quality seeds and fertilizers, addressing the low adoption rates of modern inputs and the lack of access to financing and extension services in rural areas. The success of the Cocoa Abrabopa Association in Ghana highlights the benefits of collaboration among public and private organizations in supporting smallholder farmers and promoting integrated soil fertility management practices.
Maize, Business enterprises, Decision Support Systems, Fertilizers