A ship carrying half a million quintals of urea arrived at the Djibouti ports last week. The amount accounts for nearly five percent of the total fertilizer imports scheduled for the year, while the total import stands at 3.48 million qtls.

According to the Ethiopian Agricultural Works Corporation, the shipment is the first round of urea imports, as previous shipments were of different types, such as NPS and NPS boron.

The Corporation has been the sole importer of fertilizer since 2015 and bases the amount on demand estimates forwarded from the Ministry of Agriculture. It plans to import five million quintals of urea for the harvest season, with NPS, a compound fertilizer which has garnered increasing use over the years, taking the rest of the quota. The shipments from Egypt, UAE and Morocco account for most of the imports.

According to Gashaw Aychiluhm, communications director, close to 12.8 million qtls have already been purchased, with a little over half distributed to farmer unions.

The World Bank estimates that fertilizer use in Ethiopia averages a little over 36Kgs per hectare, with agricultural land accounting for 34pc of the national land mass.

Most farmers in the Amhara Regional State receive fertilizer through cash and credit schemes facilitated by Tsedey Bank, which works in partnership with the Commercial Bank of Ethiopia (CBE).

The Regional Director, Yirga Getnet, said their Bank is merely fulfilling its corporate social responsibility in providing these services. The former Amhara Credit & Saving Institution transformed into a full-fledged bank and started operation four months ago, after 26 years of service as a microfinance institution boasting 12 million customers and 46 billion Br in assets.

According to Yirga, most farmers pay back the loans with 17pc interest rate within nine months.

Walta Farmers Union has 32 farming cooperatives with close to 20,000 smallholder farms under its fleet. The Manager, Welde Teferi, confirmed the Union had received about 8,000qtls. Although it is too early to predict, Walta does not foresee a supply shortage compared to last year.

The fertilizer is distributed to farmers on credit-based auction, with the amount and prices set after full distribution.

"It'll be calculated following the bidding process," said Welde.

Data from the central bank indicates the cost of fertilizer imports in the fourth quarter of 2022 surged by 229pc, amounting to 870 million dollars. Headline inflation had also increased to 9.5pc during the same period.