Fertiglobe manufacturer warns of threats to global market
The largest fertilizer producer in the Middle East, Fertiglobe, has warned of continuing threats to the global market. This is reported Bloomberg.
The company believes that the situation will remain tense, as more European firms are likely to cut production due to rising prices for natural gas, a key raw material. “Even with today’s elevated ammonia and urea prices, much of Europe is operating well below cost. Some companies will have a hard time because of the unprecedented prices for hydrocarbons,” said the head of Fertiglobe, Ahmed El-Hoshi.
The price of gas, which is the main feedstock for Fertiglobe’s nitrogen fertilizers, rose sharply on the back of what is happening in Ukraine and after Russia decided to cut supplies in response to Western sanctions. Fertilizer demand is likely to continue despite higher prices, El-Khochi said. This is partly due to the “critically low” stocks of grain around the world.
At the end of July, Vera Songwe, Executive Director of the United Nations Economic Commission for Africa, warned that problems with access to fertilizers could lead to a food crisis in the world. It is planting season in many countries in Africa and Latin America, and fertilizer shortages will affect future harvests and the world’s food supply. According to her expectations, the volume of the crop will decrease by 10-17 percent.
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