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    High gas prices force Yara to cut back on fertiliser supply

Summary

Yara is slashing ammonia and urea supplies in Italy and France, in a move set to affect food production costs.

by: Callum Cyrus

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High gas prices force Yara to cut back on fertiliser supply

Food fertiliser supplier Yara International said March 9 it will cut production of ammonia and urea fertilisers in Italy and France, as gas prices continue to escalate.

Due to record high European gas prices, the company will suspend its Ferrera facility in Italy and Le Havre in northwestern France. The two facilities have a combined capacity of 1mn metric tons/year of ammonia and 0.9mn mt/yr of urea.

The cutbacks will reduce Yara's European ammonia and urea output to 45% capacity by the end of this week. Yara said it would monitor the situation, using alternative global supply chains where possible, but warned challenging market conditions could lead to further curtailments.

With operations in more than 60 countries, Yara's fertilisers are key to global food supplies, but the company depends significantly on Russian wholesale purchases of gas. It was also forced to curtail European production  to around 40% capacity last September, but later operations were largely restored.

Yara CEO Svein Tore Holsether told the BBC half of the global population's food supply could be affected. "For me, it is not whether we are moving into a global food crisis, it is how large the crisis will be," he said. "On the one hand we're trying to keep fertiliser flowing to keep up the agricultural yields. At the same time... there has to be a strong reaction. We condemn the Russian military invasion of Ukraine so this is a dilemma and one that frankly is very difficult."