One of Europe’s largest fertilizer producers, the Polish chemical group Azoty, has suspended the production of fertilizers and ammonia due to soaring gas prices.
The Polish KPN chemical subsidiary Anwil has also stopped fertilizer production. The Norwegian company Yara is further reducing its production, from 45% to 35%.
Azoty announced that it is suspending the production of nitrogen fertilizers at its largest plant in eastern Poland indefinitely, and will reduce ammonia production to ten percent of capacity. No restart date has been set, and the company will closely monitor the gas market before making any new decisions.
The news will especially affect Polish farmers, who are one of the main voter groups for the ruling Law and Justice party (PiS).
“Farmers may be concerned about the production cuts, but there is more than 100,000 tons of fertilizer in the warehouses of Grupa Azoty. There will be enough for the autumn season,” said Minister of Agriculture Henryk Kowalczyk to the Polish news agency PAP.
Last month, Azoty reduced its production for the first time after having operated at nearly full capacity despite high gas prices. The Polish state supplier continued to supply gas to the fertilizer plants despite the cessation of Russian gas deliveries to Poland in April. However, the Polish gas company was forced to purchase more expensive liquefied LNG and natural gas from other EU countries.
The price increases are a result of Russia’s declining gas deliveries to Europe, which is currently working hard to replenish winter supplies. In this way, EU countries are trying to ease the gas crisis caused by Russia’s war against Ukraine and the West’s sanctions against the Kremlin.
This is expected to lead to a major economic slowdown or even a recession in the EU. EU leaders continue to accuse Russia of manipulating gas supplies to spark an economic and energy crisis during the cold winter months, attempting thereby to weaken Europe’s support for Ukraine.