1
COWESA
Competition Commission
LIBRARY OF CLOUISVILLE, KENTUCKY
# Competition, concentration, and market outcomes in fertiliser markets in East and Southern Africa
2
# Table of Contents
1 Introduction ... 6 1.1 Fertiliser supply chain overview ... 6 1.2 Approach ... 8 1.3 Competition and regional trade ... 8
2 Supply of fertiliser in East and Southern Africa ... 10 2.1 Main products, sources of imports and main transport routes ... 10 2.2 Fertiliser supply stages ... 13
3 Competition assessment: market structure and market dynamics ... 15 3.1 Overview of possible competition issues ... 15 3.1.1 Market structure and mergers ... 15 3.1.2 Factors influencing likelihood of collusion ... 16
International and export cartels ... 17
Cartel screening ... 18 3.2 Major suppliers and market shares in fertiliser markets ... 18
Market shares by country and region ... 23 3.3 Review of mergers ... 24 3.4 Country assessments: East Africa ... 31 3.4.1 Kenya ... 34 3.4.2 Rwanda ... 37 3.4.3 Uganda ... 38 3.5 Country assessments: Southern Africa ... 40 3.5.1 Malawi ... 42 3.5.2 Zambia ... 44 3.5.3 Zimbabwe ... 46 3.5.4 DRC ... 48
2
3
4 Competition Assessment: pricing, costs and possible effects 49 4.1 Introduction: concentration, market structure and main companies 49 4.2 Pricing of fertiliser relative to benchmarks and costs 51 Prices and costs 53 4.3 Analysis of conduct: structural and behavioural screens for coordination 56 4.4 Implications for merger review 58 5 Conclusions 63 Appendix A: Figures and tables 64 Appendix B: Maps 65 B1. Malawi 65 B2. Kenya 65 B3. Zambia 66 B4. Zimbabwe 66 References 67
Table of figures
Figure 1. Tiers in the fertiliser supply chain 7 Figure 2. Nitrogen Fertiliser use per hectare of cropland, 2020. 12 Figure 3. Sea freight, fuel, energy, and fertiliser price trends (indices) 14 Figure 4. Import volumes and prices in Eastern Africa 33 Figure 5. Import volumes and prices in Southern Africa 41 Figure 6. Fertiliser prices, urea 51 Figure 7 Import prices vs world prices, Urea (per quarter) 52 Figure 8 Fertiliser Import prices, DAP 53
Table of tables
Table 1 Approximate apparent demand by country and main supply routes 12 Table 2. Company profile summaries: large international tier of companies 19 Table 3. Major importers of fertiliser and their market shares – Eastern Africa 24 Table 4. Major importers of fertiliser and their market shares - Southern Africa and the DRC 24 Table 5. Freight, transport and related costs, March-May 2023 55
3
4
# Executive Summary