Yara to Fill UK with Ammonia Feedstocks Amid Production Rundown, Is Fertilizer Supply to Stabilize?

Yara International, the world’s largest fertilizer producer, has stepped forward to the farmers’ aid amid low supplies of fertilizers (such as ammonium nitrate and calcium ammonium nitrate) in the UK and the rest of Europe following major plant shutdowns and curtailed plant operations. 

As per the statement issued by the company’s officials, Yara will be trading an adequate amount of ammonia from its production plants at Trinidad, United States and Australia to the UK in order to maintain the undisrupted availability of ammonia feedstocks to the fertilizer production facilities in the country.

This decision has been taken when fears spread in the fertilizer market and agricultural sector after CF Industries, another fertilizer giant with accountability of 40% of UK’s fertilizer production had to shut down its plant operations at Billingham and Ince facilities due to scanty natural gas supplies.

UK has been going through natural gas crises owing to its spiralling rates resulting from the combined effect of supply shortage from Russia, and from the USA post Ida landfall.

Natural gas is a key feedstock for the production of ammonia. Hydrogen obtained from the chemical reduction of natural gas to carbon and hydrogen molecules, is further reacted with nitrogen derived from the air, to produce ammonia through the Haber-Bosch process. Ammonia is the raw material for all nitrogen-based fertilizers including the widely used ammonium nitrate. With the unabated rise in natural gas prices, ammonia prices have also gone up. According to market analysis, around 80% of ammonia consumption is incurred by the fertilizer sector which is also the major driver for its demand that is anticipated to increase at a CAGR of 3.5%. 

The agriculture sector is in a state of despair owing to the price surge of fertilizers that are forbidding wholesalers and farmers to pile up stocks for the next crop season which is expected to be impacted heavily. As per ChemAnalyst, Yara’s intervention in meeting the UK’s demand for ammonia is an impressive move that is expected to pause the ongoing panic in the fertilizer market, however, will it be able to stabilize the feedstock supplies and their surging prices for a long time is still a question.