An Action Plan for Developing Agricultural Input Markets in Tanzania

Table II.6. Estimates of Fertilizer Imports, Tanzania (2003)
Source: Based on information gathered during field visits.
Tanga. The blending plant at Tanga, which was established
in 1972 based on imported material, ceased operations
in 1991. TFC warehouse storage capacity at
that time was about 140,000 tons, both owned and
leased, and TFC had about 800 employees operating
with subsidies and financial assistance from the government
until these were withdrawn in 1994/95. Since
then it has had to compete with companies in the private
sector. TFC has shrunk and now operates with 40
employees. TFC estimates that there is an effective
demand in the market for fertilizers of about 120,000
product tons, although the potential demand could be
more than 400,000 product tons. Of the actual consumption
in the market, the TFC share is approximately 18%-
20%. The Tanga factory has been sold. The marketing
operations (with about 70,000 tons of warehouse capacity
and a few vehicles as the only assets) have been
earmarked for privatization since 1996 but there are no
buyers. To generate income, TFC has been leasing out
the warehouses in Iringa, Mbeya, and Songea (10,000ton
capacity each), and at Tabora (30,000-ton capacity;
50% of which is leased to the tobacco companies).
The commercial banks do not advance loans to TFC
because of the substantial losses carried forward. TFC
has therefore been making efforts to obtain suppliers
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credit and last year imported 2,500 tons of product in
this manner. TFC’s breakeven point is sale of 15,000
tons and this has been difficult to attain. TFC feels that
the market has not grown due to the following reasons:
• Agricultural output does not fetch good prices.
• Farmers seem satisfied with the yields they obtain
using natural material.
• Maize is not produced commercially in Tanzania.
• Long distances are involved from the point of imports
(or manufacture in the past).
• Until recently, maize could not be exported.
Since the KR II imports came late in 2003, and the
market had been waiting for these imports (that for the
past few years had been auctioned in the open market),
availability of urea and CAN for topdressing was low
and there were several complaints from the farmers.
The government overreacted to this and decided to
avoid a similar situation in 2004 by arranging the imports
of 8,000-10,000 tons through TFC and supplying
this at subsidized (transportation subsidies) prices in
the “four big” (agriculturally important) regions of
Mbeya, Iringa, Rukuma, and Rukva. TFC was provided
Tanzanian Shillings 3.5 billion in November 2003 to
arrange these imports. In addition, TFC was hoping to