Norway's Yara cuts European fertiliser output as gas prices surge
OSLO, March 9 (Reuters) - Norway's Yara YAR.OL , one of the world's largest fertiliser makers, is curtailing its ammonia and urea output in Italy and France due to the surge in natural gas prices, it said on Wednesday, in another sign of rising costs for food production.
The price of natural gas, which is used in the fertiliser manufacturing process, hit record highs in recent days following the Russian invasion of Ukraine.
Yara's plants in Ferrara, Italy and in Le Havre, France, have a combined annual capacity of 1 million tonnes of ammonia and 0.9 million tonnes of urea fertiliser.
"Including optimisation and maintenance at other production facilities, Yara's European ammonia and urea production is expected to be operating at approximately 45% of capacity by the end of this week," the company said in a statement.
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 fertilisers.
Europe can still import fertilisers from other regions of the world, where gas prices are lower, but any output cuts are likely to have a negative impact on global supply, analysts have said.
"Yara will continue to monitor the situation and to the extent possible use its global production system to keep supplying customers and secure continuity in food supply chains, but curtailing production where necessary due to challenging market conditions," the company said.
Yara in September last year announced ammonia curtailments in Europe as gas prices rose but later said production had been mostly restored.
European and British wholesale gas prices hit unprecedented levels on Monday on escalating fears that Russian energy exports could face sanctions after Russia's invasion of Ukraine.
Moscow describes its actions in Ukraine as a "special operation" to disarm its neighbour and unseat leaders it calls neo-Nazis. Ukraine and its Western allies call this a baseless pretext to invade a country of 44 million people.
Reporting by Terje Solsvik; Editing by Gwladys Fouche; Editing by Edmund Blair
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.