Kenya: Gulf Tensions Expose Kenya to Higher Fertilizer Costs - WTO

Nairobi — Rising geopolitical tensions in the Gulf could push up fertilizer prices in Kenya and increase production costs for farmers, with the World Trade Organization (WTO) identifying the country among the most vulnerable import-dependent economies.

The WTO said Kenya's heavy reliance on imported nitrogen fertilizers from Gulf producers leaves it particularly exposed to any prolonged disruption of exports through the Strait of Hormuz, a key global shipping route for fertilizer trade.

The warning comes as concerns mount over instability in the Middle East, with the WTO estimating that export restrictions imposed during the recent conflict affected up to 15 percent of global fertilizer trade. That share could rise to 23.3 percent if all fertilizer exports transiting the Strait of Hormuz were disrupted.

"These economies, which constitute around one-fifth of the 81 economies that import from the Gulf region, combine high import dependence with strong reliance on Gulf suppliers," the WTO said.

"This group includes developing economies in Africa, such as Kenya, Malawi, Mozambique, Rwanda, South Africa, Tanzania, Uganda and Zimbabwe. It also includes Brazil, Nepal and Sri Lanka. Seven countries in this group are least developed countries (LDCs)."

The WTO noted that Gulf economies accounted for nearly a quarter of global nitrogen fertilizer exports in 2024, highlighting the region's critical role in global agricultural supply chains.

For Kenya, any prolonged disruption could increase fertilizer costs, raise farm production expenses, reduce fertilizer application and ultimately weigh on crop yields, with the potential to fuel food inflation.

The country had only recently begun recovering from the fertilizer price shock triggered by the Russia-Ukraine war, aided by government subsidy programmes that lowered input costs for farmers.

Benin, Burkina Faso, Burundi, Ethiopia, Madagascar, Mali and Niger are also among other African economies most exposed to fertilizer supply disruptions, according to WTO.

While the WTO stopped short of predicting an immediate shortage, it cautioned that prolonged instability in the Gulf could disrupt fertilizer trade flows, increase costs for import-dependent economies and pose fresh risks to global food security.

Read the original article on Capital FM.