Food security and fertiliser corridors

1. Decision reviewed

The operating framework assesses the conditions under which a European company can participate in a grain or fertiliser supply chain in West Africa without confusing food needs, solvent demand and a bankable transaction. The four countries are analysed separately: they share corridors and regional rules, but have different currencies, ports, agricultural policies, sovereign risks and financial capacities.

2. Real demand and seasonality

National needs data alone are not sufficient to size a transaction. Crops, agricultural calendar, availability of domestic product, public programmes, stocks, distribution capacity and the price affordable to the end user must be reconstructed.

• Cereals: distinguish human, feed and industrial consumption; bread-making quality, moisture, protein, mycotoxins and storage methods.
• Fertilisers: separate urea, NPK and specific formulations; verify crop, soil, dosage, application period, registration and packaging.
• Seasonality: delay beyond the agricultural window can eliminate the economic value of a supply even when the goods conform to specification.
• Accessibility: demand and need do not coincide with ability to pay. Price, subsidy, credit and distribution determine the effective market.

3. Four markets, four sets of checks

4. Fertiliser regulation

ECOWAS Regulation C/REG.13/12/12 seeks to harmonise fertiliser quality control and marketing. The existence of a regional framework does not eliminate national registrations, controls and enforcement. For each product, the following must be verified:

• composition, tolerances, labelling, packaging and required language;
• registration or authorisation of the product and operator;
• sampling, laboratory testing, pre-shipment inspection and inspection on arrival;
• liability for off-specification, adulterated or deteriorated product;
• compatibility of the formulation with the crop, soil and distribution programme;
• regime applicable to donations, public tenders, pooled procurement and commercial sales.

5. Logistics corridor

The port delivery term does not represent the delivered cost. The model must include vessel waiting time, discharge, handling, storage, technical losses, bagging, inland transport, tolls, security and the cost of delay.

1. select the port based on draught, terminal, cargo, season and discharge capacity;
2. book storage and vehicles before the vessel arrives;
3. independent control of quantity and quality at loading, discharge and delivery;
4. plan for demurrage, congestion, rain, deterioration and corridor disruption;
5. traceability from the shipped lot to the final recipient;
6. verify borders and transit where the destination is inland or in the Sahel.

6. Payment and bankability

A transaction is bankable only when cash flows, responsibilities and documents are compatible. Sponsor credibility or the political importance of the project does not substitute for creditworthiness.

• identify the buyer, debtor, payer, importer and final beneficiary;
• verify financial statements, working capital, FX exposure and capacity to absorb the goods;
• define documentary credit, confirmation, credit insurance, sovereign guarantee or ECA support only where actually available;
• avoid payment documents controlled exclusively by the buyer;
• align financing maturity with production, voyage, customs clearance, distribution and collection;
• determine who bears increases in freight, demurrage, FX movements and administrative delays.

Applied example: first fertiliser supply

A first transaction is not expanded simultaneously to four countries. One verifiable market, importer, corridor and agricultural cycle are selected, while keeping initial volume and exposure contained.

1. technical specification and tolerances defined before quotation;
2. pilot volume compatible with storage, distribution and credit capacity;
3. Incoterms 2020 delivery term consistent with the parties’ actual control;
4. independent inspector appointed and acceptance criteria agreed;
5. payment conditional on obtainable and verifiable documents;
6. port and inland plan with responsible parties, capacity and timelines;
7. weekly monitoring of authorisations, foreign exchange, vessel, port and corridor;
8. volume increases only after successful completion of the pilot cycle.

Indicative roadmap

Mandate framing, verification of essential information, qualification of counterparties and transaction structure, decision and implementation support. Sequencing, responsibilities and timelines are defined according to the scope agreed with the client.

8. Conditions requiring a no-go

Preliminary checks are intended to determine whether sufficient conditions exist to continue the transaction. If any of the circumstances below emerge, the review is suspended until the issue has been fully clarified. If the issue cannot be resolved or adequately mitigated, Sentinel recommends not proceeding.

• demand supported only by national estimates, without a solvent buyer or distribution plan;
• unregistered product or specification incompatible with local requirements and use;
• beneficial owner, importer licence or final recipient cannot be verified;
• absence of foreign exchange, guarantee or confirmed payment structure before shipment;
• port, storage or inland transport without booked and documented capacity;
• volume exceeding the counterparty’s financial, logistics or commercial capacity;
• tender, subsidy or public guarantee presented as certain without a valid instrument;
• request to alter origin, quality, value or recipient in documents;
• inability to insure the goods, credit or political risk on sustainable terms;
• delay making delivery incompatible with the agricultural season.

Non-public content

Analytical matrices, parties reviewed, operating sources, documentary checks, FX scenarios, payment structures, blocking conditions and engagement methods are not published. They are prepared exclusively in relation to a qualified need and the specific scope of the mandate.