Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, what recent assessment his Department has made of the stability and security of the agricultural fertiliser supply chain; and if he will make a statement.
We are aware that due to the increase in cost of natural gas across the globe, which is a key input for the production of ammonium nitrate-based fertiliser products, the cost of production of these fertiliser types has increased significantly. Increased demand has also increased the cost of other alternative fertiliser types. Rising cost of natural gas is affecting Europe and the global market with fertiliser companies halting production due to high input costs.
Industry data reports that ammonium nitrate prices are at record highs, having nearly tripled in price since last November. They state that from November 2020 through to November 2021, the price of imported ammonium nitrate rose from £219 per tonne to between £600 and £630 per tonne, an increase of between 174-188%. Over the same time period, the price of UK produced ammonium nitrate also rose, from £208 per tonne to between £585 and £605, an increase of 181-191%.
A few months ago, the CO2 industry reached an agreement to ensure UK businesses have access to a sustainable supply of CO2. The Government supported this through a short-term financial intervention to allow CF Fertilisers to continue operating while the industry moved towards this agreement. Ammonium Nitrate production has therefore restarted and is being placed onto the domestic market.
Defra have been in contact with key industry figures including the NFU and fertiliser producers and importers, and have frequent contact with the key sector representative body for fertilisers the Agricultural industries Confederation (AIC).
We are continuing to monitor the security and stability of fertiliser and other supply chains and working closely with colleagues across government as well as industry figures. This will help inform how Defra and other industry bodies can best support farmers.