Yara has idled more than half of its European ammonia production capacity due to a steep drop in fertiliser prices and reported first-quarter earnings well below forecasts on Friday, as farmers delayed purchases hoping for even lower prices.
A view of the buildings at Yara plant showing Yara logo and yellow sign in Porsgunn, Norway February 13, 2023. REUTERS/Victoria Klesty58% of European ammonia capacity idle at end-Aprilhas idled more than half of its European ammonia production capacity due to a steep drop in fertiliser prices and reported first-quarter earnings well below forecasts on Friday, as farmers delayed purchases hoping for even lower prices.
Yara's shares were down 5.6% to 423.30 Norwegian crowns at 0808 GMT, underperforming a 0.7% drop in the Oslo benchmark indexThe momentum has fizzed out for European fertiliser makers following a supply squeeze of essential crop nutrients last year due to the war in Ukraine. Furthermore, global production capacity is expected to increase above the historical trend in 2023 and 2024.
In the first quarter, 44% of its European ammonia capacity, and 52% of finished fertiliser capacity, was shut. Farmer economy metrics are now very favourable, however, with food prices in relation to fertiliser prices historically high, indicating higher nitrogen application rates.
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