The fertiliser market is expected to be exposed to greater volatility following the announcement that CF Fertilisers will permanently close its Co Durham ammonia plant.
It comes as the UK’s four farming unions have called on the Competitions and Markets Authority (CMA) to examine the fertiliser market in the UK after producers revealed record profits for 2022.
The decision by CF Fertilisers comes after 10 months of the Billingham-based plant not being in operation and using imported ammonia.
But now the firm has confirmed it will permanently close the factory as producing ammonia ”will not be cost-competitive for the long-term”.
Responding to CF Fertilisers’ decision, NFU Scotland vice-president Andrew Connon said: “At a time when NFUS is calling for an investigation into the fertiliser market, after manufacturers posted record profits for 2022, this decision taken to close Billingham is a disappointment and one and that exposes our fertiliser market to greater volatility and an increased reliability on imports from a very small number of manufacturers.
“Availability of fertiliser is a crucial element of a stable domestic food chain and reliance on importing ammonium nitrate further exposes British food production to possible long-term risks at a time when input costs and produce prices remain unstable. The strategic importance of fertiliser and its role in Prime Minister Rishi Sunak’s ‘farm to fork’ ambitions must be recognised by Government.
“With this closure, we believe it is imperative that the UK government acts with a sense of urgency on this matter to avoid a further reduction in home grown food which will have ramifications for tackling food price inflation.”
NFU England Deputy President Tom Bradshaw also weighed in on the situation and described the decision as ‘concerning’.
“Availability of fertiliser is a crucial element of domestic food security and relying on importing ammonia from global markets exposes British fertiliser production to possible long-term risks.
“It’s important that the Government now look closely at how this shift to a reliance of imported ammonia could impact our domestic food production and highlights the need to maintain access to all nitrogen fertiliser products including urea.”
Analysis published by the Energy and Climate Intelligence Unit revealed that the three biggest fertiliser suppliers in the UK – CF Industries, Yara and Origin Fertilisers – made £5.45 billion in combined net profit in 2022.
This was up a staggering £909 million the previous year and according to the report, fertiliser company profits jumped 500% in 2022.
The company’s proposal to permanently close the ammonia plant at its Billingham Complex could result in up to 38 redundancies at the site.
