Key words of the passage: fertilizer; use; price; product; market

• l Global fertilizer use could plunge 7% next season, IFA says

• l About 25% of Europe’s nitrogen capacity is curtailed: CRU

The energy crunch throttling Europe’s fertilizer output is threatening to force the world’s farmers to use even less of the nutrients crucial for growing food.

Soaring prices of gas, a key feedstock, have already curtailed a quarter of Europe’s nitrogen fertilizer capacity, CRU Group estimates. Now, worries are mounting that the crisis will worsen. For Europe, that could mean even less production and more dependence on imports of ammonia, from which nitrogen products are made.

That will also have a knock-on impact elsewhere. Faced with higher prices and tighter supplies, farmers may cut global fertilizer usage as much as 7% next season, the most since 2008, the International Fertilizer Association warns. That risk curbing harvests as the world grapples with a cost-of-living crisis and worsening hunger.

“If European farmers import more products from other exporters, then for the more fragile agricultural markets in sub-Saharan Africa, South Asia and parts of Latin America, this will make the global market tight,” IFA Director of Market Intelligence Laura Cross said.

The biggest drop in fertilizer usage next season will be in sub-Saharan Africa, with a decline of as much as 23%, the IFA says.

After easing in previous months, fertilizer prices have started rising again, as gas rallied on the back of reduced supplies from Russia and European heat waves that have stoked demand.

European fertilizer makers have been hit hardest by high gas prices. The global sector has also contended with US and European Union sanctions on potash sales from Belarus and China’s move to rein in shipments. Plus, trade in Russian nutrients has suffered from many shippers, banks and insurers self-sanctioning and difficulties in servicing Russian exports.

Source: Bloomberg