Farmers may struggle to benefit from declining global urea prices ahead of the 2026/27 agricultural season due to forex scarcity, import financing constraints and transport costs on domestic fertiliser prices, agricultural economists have warned.
The Reserve Bank of Malawi’s (RBM) August 2026 Market Intelligence Report shows that international urea prices declined by 2.5 percent to $390 (about K683 000) per metric tonne from $400 (about K700 000) in July.
However, diammonium phosphate (DAP) prices increased by 1.6 percent to $793.50 per tonne from $781.30, highlighting mixed movements in international fertiliser markets.
In an interview on Tuesday, Lilongwe University of Agriculture and Natural Resources agricultural economist Innocent Pangapanga-Phiri said lower international prices were not yet fully translating into domestic retail price reductions.
He said: “Importers must pay for fertilizer imports in US dollars. Limited foreign exchange availability means importers often face higher financing costs or obtain foreign currency at less favourable rates.
“As a result, the effective exchange rate, rather than the international urea price alone, strongly influences local pricing.”
Pangapanga-Phiri said Malawi’s landlocked position further compounds costs, with fertiliser transported through regional ports such as Beira and Nacala before reaching domestic markets.
He warned that reduced fertiliser application could lower maize yields, tighten food supplies and intensify inflationary pressures.
Pangapanga-Phiri called for priority foreign-exchange access for agricultural inputs and wider adoption of integrated soil fertility management.
“While farmers may be tempted to substitute cheaper nitrogen sources such as urea for more balanced fertilizer programmes, this can worsen nutrient deficiencies over time,” he said.
Mwapata Institute research fellow Christone Nyondo said Malawi’s dependence on imported fertiliser compounds exposes domestic prices to international market fluctuations.
He said: “Malawi imports almost all fertiliser compounds used for local agricultural production, and 90 percent of domestic fertiliser prices are set before consignments even cross into Malawi.
“This 90 percent emanates from costs associated with fertiliser logistics, including forex, transport, warehousing, handling, and other costs.”
Nyondo warned that fertiliser shortages could undermine agricultural production and economic growth.
“Malawi’s dependency on chemical fertilisers means that any shortages translate into high prices and low productivity and overall production,” he said.
The economist’s concerns come amid international commodity market volatility.
The World Bank’s October 2026 Africa Economic Update reports that global fertiliser prices increased by approximately 45 percent between February and April, alongside a nearly 70 percent rise in Brent crude oil prices.
The update identifies Malawi among countries particularly vulnerable to international energy-price shocks.
“This combination of elevated exposure and weak resilience was particularly pronounced in Burundi, Malawi, Senegal, South Sudan, and Sudan,” reads the update.
Questionnaires seeking information on fertiliser availability, procurement costs and domestic prices were sent to the Ministry of Agriculture and industry stakeholders, but no responses had been received by publication time.
Current domestic retail price movements and fertiliser stocks for the coming season could therefore not be independently established.
