SAUDI'S MAADEN TO BENEFIT

How fertiliser business was handed to a monopoly

By a stroke of a pen the multibillion fertiliser business was handed to Saudi Arabia suppliers, creating a monopolistic culture in Kenya

In Summary

• Fertilizers made from phosphate rock naturally contain cadmium, which has been linked to kidney and bone disease. 

• The monopoly market has hit farmers hard with soaring fertiliser prices making the cost of production very expensive that neighbouring countries.

A worker carries a sack of fertiliser at a National Cereals and Produce Board store.
A worker carries a sack of fertiliser at a National Cereals and Produce Board store.
Image: FILE

Details have emerged how a decision by a five-member committee plunged Kenyan farmers into the mercy of a single fertiliser trader.

The panel was established by the Kenya Bureau of Standards technical committee last year to deliver a scientific justification for lowering cadmium levels in fertilisers in the country.

This was after the technical committee, which brings together major fertiliser manufacturers and government agencies in the agriculture sector, failed to agree on the proposal to reduce the cadmium limit in the country.

 

Fertilizers made from phosphate rock naturally contain cadmium, which has been linked to kidney and bone disease. 

But in what has lifted the lid on behind the scenes intrigues by vested interest in the lucrative industry, the five-member committee recommended that the cadmium levels in fertilisers be lowered from 30 parts per million to 15 ppm.

The move has triggered a storm in the industry with other fertiliser suppliers fearing closing their business as they will no longer be able to sell their products since they don't meet the Kebs requirement.

Some of the fertiliser manufactures and suppliers include Osho Chemicals, YARA East Africa, Kenya Tea Development Agency, Chemagro, OCP, KEL Chemicals, Amiran,  MEA, Toyota Tshusho and Elgon Chemicals.

The Star has established that there is grumbling in the sector amid claims that Henry Ogola, who chaired the technical committee which recommended the lowering of the cadmium levels, is a local agent of a firm which is the only one that meets the requirement.

Ogola yesterday dismissed the claims but confirmed that he deals with fertiliser multinationals across the world. 

“What I can say is that I am a fertiliser expert with so many big companies. It is the work of Kebs and not me to set standards,” he told the Star on phone.

 

The five-member panel recommended to the Kenya Bureau of Standards to lower the levels of cadmium required for all phosphate phosphate fertilisers from 30 parts per million to 15ppm, in what favours  Saudi Arabia suppliers.

The far-reaching policy shift meant that the Kenyan market had been, by a stroke of a pen, been closed to a Saudi Arabia conglomerate, Maaden, as the single supplier.

There are also claims that the working group focused on phosphate levels instead of scientific justification of reducing cadmium limits, thereby misleading the country.

While the group’s findings were also meant to advise on further action, the panel ended up delivering a report on sources of fertiliser and concluded that the bulk comes from the Middle East.

The net effect of this recommendation meant that lowering the cadmium limits to 15ppm would not jeopardise supply.

This created a monopoly in the multibillion fertiliser market in Kenya at the expense of other dealers.

The new levels of cadmium required for all the phosphate fertilisers entering the country were officially gazetted by Kebs on February 23, 2018, consequently locking out competition from other fertiliser suppliers.

Maaden, which had publicly backed the lowering of cadmium limit from 30 ppm to 15 ppm, is the only supplier which meets the Kenya’s new threshold.

The monopoly market has hit farmers hard with soaring fertiliser prices making the cost of production very expensive that neighbouring countries.

During a meeting at Kebs on November 3, 2016, Maaden argued, “Lowering the limit is the right approach to protect agriculture industry in Kenya as 90 per cent of the cadmium in Africa come from phosphatic fertilisers.”

Its main competitor, OCP Africa, advocated for the retention of cadmium levels at 30ppm “unless there is clear scientific evidence to establish that a lower limit is justified to protect health and Kenyan exports”.

In the letter, OCP Kenya also accused the chairman of the technical committee on fertilisers of being an agent for Maaden which is “attempting to create a technical trade barrier through change of standards.”

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