Yara cuts fertilizer production in Europe amid rising gasoline prices

Operational capacity in Italy and France will drop to 45% by the end of the week

March 9, 2022

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Norway’s Yara, one of the world’s biggest fertilizer makers, is cutting ammonia and urea production in Italy and France due to soaring natural gas prices, it said on Wednesday. , in another sign of rising food production costs.

The price of natural gas, which is used in the process of making fertilizers, hit record highs in recent days after Russia’s invasion of Ukraine, Reuters reported.

Yara’s plants in Ferrara, Italy, and Le Havre, France, have a combined annual capacity of 1 million tons of ammonia and 0.9 million tons of urea fertilizer.

“Including the optimization and maintenance of other production facilities, Yara’s European ammonia and urea production is expected to be operating at approximately 45% capacity by the end of this week,” the company said. company in a press release.

Yara is the world’s second largest producer of ammonia with a capacity in Europe of 4.9 million tonnes per year, which in turn is used in the manufacture of urea-based fertilizers.

Europe can still import fertilizer from other parts of the world, where gas prices are lower, but any production cuts are likely to have a negative impact on global supply, analysts said.

“Yara will continue to monitor the situation and, where possible, will use its global production system to continue to supply customers and ensure the continuity of food supply chains, but reducing production if necessary due to weather conditions. tough market,” the company said.

Yara announced ammonia cuts in Europe in September last year as gas prices rose, but later said production had largely been restored.

European and British wholesale gas prices rose to record highs on Monday on growing fears that Russian energy exports could face sanctions following Russia’s invasion of Ukraine.

Moscow describes its actions in Ukraine as a “special operation” to disarm its neighbor and overthrow leaders it calls neo-Nazis. Ukraine and its Western allies call it a baseless pretext to invade a country of 44 million people.