Market News & Headlines >> High Natural Gas Prices Hit Fertilizer Production

Norway's Yara, one of the world's largest fertilizer manufacturers, on Wednesday said it is cutting back ammonia and urea production in Italy and France due to the surge in natural gas prices caused by the Russia-Ukraine war and Western sanctions against Russia.

The price of natural gas, which is used in the fertilizer 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 metric tons of ammonia and 900,000 metric tons of urea fertilizer.

"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 cut back ammonia production in Europe in September 2021 after natural gas prices soared, but later said production had been mostly restored.

Yara is the world's second largest producer of ammonia with a capacity in Europe of 4.9 million metric tons per year, which in turn is used in the manufacture of urea fertilizers.