The NFU has sought an urgent meeting with CF Fertilisers after the company said it was temporarily halting ammonia production at its Billingham complex. Instead, the manufacturer said it will import ammonia for produce ammonium nitrate fertiliser and nitric acid at the site.
‘At current natural gas and carbon prices, CF Fertilisers UK’s ammonia production is uneconomical, with marginal costs above £2,000 per tonne and global ammonia prices at about half that level,’ the company said in a statement. ‘The current cost of natural gas at NBP is more than twice as high as it was one year ago, with the NBP forward strip suggesting that this price will continue to rise in the months ahead.’
Earlier this month the company refused to sell its mothballed fertiliser plant at Ince in Cheshire. The NFU commented, ‘Farm businesses across the country are being affected by the ongoing energy crisis. Gas prices continue to surge, with prices more than double what they were in early June and 11 times higher than this time last year.’
NFU President Minette Batters said, “This move by CF Fertilisers to temporarily suspend ammonia production is extremely worrying and is a sign of the pressure the fertiliser and energy markets are under.
“We will be monitoring any impact this decision has on the immediate fertiliser market and we will be meeting with CF Fertilisers to understand what this suspension means for future fertiliser orders and how long this temporary halting of production is anticipated to last for.
“The NFU will continue to engage with the government on action to improve the resilience and transparency of the fertiliser market, which is crucial to maintaining and enhancing our domestic food production. I am also urging the government to review how this decision impacts CO2 availability in the UK, which is essential in the food supply chain to process and package food.”
At the same time, Norwegian-based Yara, the world’s largest fertiliser manufacturer, also announced it was reducing its European ammonia production to about 35%. It too says it will continue to produce fertiliser using imported ammonia. Berenberg analyst Adrien Tamagno told Reuters, “That is going to lead to a bit lesser volume supplied on the soil. And basically, in short, the long-term implication is higher food prices.”