Bloomberg reported that the company would also curtail ammonia production because energy costs have threatened the business’s profitability. Natural gas is a vital raw material for the production of synthetic fertilizers, and rising prices have had a severe impact on the industry, with many fertilizer producers closing down in Europe. Fertilizer use is also declining due to prices, which have grim implications for global food security. According to the International Fertilizer Association, fertilizer use could shrink by as much as 7 percent next season, which would be the biggest drop since 2008, Bloomberg reported earlier this month. “If European farmers import more produce than other exporters, then for the more fragile agricultural markets in sub-Saharan Africa, South Asia and parts of Latin America, this will make the world market tight,” said a senior IFA official. “I don’t see how anyone continues to produce in Europe, except for those who have offset” their energy costs, Chris Lawson, head of fertilizers at the CRU intelligence group, told Bloomberg. “We expect ammonia prices to continue to rise.” Further exacerbating the problem is the fact that Europe imports much of its fertilizer from Russia. Due to the standoff between Brussels and Moscow amid the war in Ukraine, the former is looking for alternatives, including manure. Meanwhile, fertilizer imports from elsewhere are on the rise, reducing poorer nations’ access to vital agricultural products. The fertilizer industry is not the only one suffering from excessive natural gas prices. According to a Reuters analysis, nearly 50 percent of aluminum and zinc smelters in Europe have closed, with Norsk Hydro-owned Slovalco in Slovakia the latest victim. By Irina Slav for Oilprice.com More top reads from Oilprice.com:
