AGF Nitrogen considers cutting ammonia output
Key highlights
- AGF Nitrogen is the second-largest fertilizer and nitrogen products producer in Europe.
- The company is considering limiting ammonia production across its plants due to rising input costs.
- Key drivers are rising natural gas prices and emission allowance costs that are much higher than elsewhere.
- AGF's CEO Petr Cingr warns fertilizer prices are becoming unaffordable for farmers, risking demand and European food security.
Production plans
AGF Nitrogen says it is considering limiting ammonia production at its plants. The move would respond to sustained cost pressure on ammonia manufacture and the downstream fertilizer business.
Cost drivers
The company links the pressure to rising natural gas prices and continuously high prices of emission allowances, which it says are many times higher than in the rest of the world and feed directly into ammonia and fertilizer costs.
Market and food-security impact
AGF reports that higher ammonia and fertilizer prices are already suppressing farmer demand for the coming season. CEO Petr Cingr warned that without fertilizers it is not possible to secure sufficient harvests, and described the current situation as a serious threat to European food security.
Source: AGROFERT