Market News & Headlines >> Fertilizer Maker Warns of Higher Food Costs
Yara International, one the world's largest fertilizer makers, warned on Wednesday that the world faces higher food prices because of rising energy costs and that it could lead to famine for the most vulnerable.
Higher energy prices will make food more expensive as farmers face higher input costs, such as fertilizers, said Yara CEO Svein Tore Holsether.
"I am particularly worried that the most vulnerable are going to be hit again, the second shock to the food system in a very short time, after the pandemic," Holsether told Reuters News Service."The impact will likely be that we face famine (in some places)," he said, adding he had discussed his concerns with David Beasley, the head of the United Nations' World Food Programme, this week.
The Norwegian company, which posted stronger-than-expected third-quarter profits, also said high natural gas costs would continue to curtail its ammonia output in Europe. Natural gas is the most important cost input for nitrogen-based chemicals and fertilizers, including ammonia.
The front-month European benchmark gas price has almost quadrupled this year to record levels, amid high demand as economies recover from the pandemic and below-average gas storage levels at the start of the winter heating season, Reuters noted.