Nov 4 (Reuters) - A shortage of nitrogen fertilizer due to soaring natural gas prices is threatening to reduce global crop yields next year, CF Industries, a major producer of the crop nutrient, said on Thursday.
European gas prices have jumped amid high demand, as economies recover from the pandemic and with below-average gas storage levels at the start of the winter heating season. Natural gas is a key input in the production of nitrogen-based fertilizers and higher costs have caused some producers to cut production.
"Who's going to get the scarce tons that are out there? ... There's going to be a lot of unmet demand that's going to be pent up," CF (CF.N) Chief Executive Tony Will told analysts on a conference call. "And so we do think yield is going to be, on a global basis, off next year. Not because of demand destruction, just because there's not enough tons available."
Prices of nitrogen fertilizer, one of the most commonly used fertilizers to boost production of corn, canola and other crops, are at their highest levels in more than a decade.
Hurricane Ida also hit CF's ammonia plants in Louisiana in late August, forcing them to halt production.
Strong global fertilizer demand looks set to last into at least 2023, CF Senior Vice-President of Sales Bert Frost said.
U.S.-based CF's predictions of constrained crop production echo those last month of Norwegian rival Yara International ASA (YAR.OL), which warned rising fertilizer costs would drive up food prices and could lead to famine.
Russia will limit exports of nitrogen fertilizers for six months to try to curb any further increase in food prices, its prime minister said on Wednesday. China is also limiting nitrogen exports.
CF reported on Wednesday a $185 million quarterly net loss, factoring in an impairment charge related to shutting its United Kingdom operations in September due to high natural gas costs.
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