UK and several European fertiliser manufacturers have suspended fertiliser production due to unprecedented gas prices.
This will have an impact on agriculture and food production. Ammonia, fertiliser and CO2 production is needed for growing and processing food and drink products. This includes CO2 for slaughterhouses, fertiliser for farmers and nitric acid in industrial chemicals.
A combination of an unprecedented gas price, together with uncertainty over future UK and EU energy policies risks a loss of competitiveness on the international market.
Speaking today Robert Sheasby, AIC Chief Executive has called on Government to work with industry to address the cumulative impact of energy and climate change costs. “The focus must be on the delivery of sustainable UK supply chains and manufacture of inputs, whilst addressing long term competitiveness”.
On supply of fertiliser to the UK’s farming sector he added: “The industry is working hard on ensuring that supplies are available, but farmers need to make sure that their orders are placed in good time as coupled with the haulage shortfall, service levels may be affected in the short term and forward planning and early communication by prospective purchasers is a prudent policy”.
AIC will continue to engage with relevant stakeholders in the supply chain and Government and provide further information and updates when they are available.
The UK is not self-sufficient in fertiliser. Around 40% of the UK market is supplied by one primary manufacturer, who in turn provides 60% of the CO2 supplied to the UK. The rest of the UK’s fertiliser and CO2 relies on imports.
UK and some European fertiliser manufacturers have suspended production from 16th September due to an unprecedented rise in gas prices. Wholesale prices for gas have increased 250% since January – with a 70% rise since August.
Prolonged shortages will have an impact on agriculture and food production. This is because the manufacturing of fertiliser also produces CO2as a by product, meaning that the sector is of critical importance to the farming, food processing and healthcare sectors. Alongside providing fertiliser for farmers, CO2 is required for use in abattoirs and packaged foods and nitric acid is used industrial and cleaning chemicals.