B.O.H.I.C.A.: Bend Over Here It Comes Again!
From Bloomberg:
Fertilizer producer CF Industries Holdings Inc. will halt ammonia production at its remaining UK plant in response to soaring natural gas prices, in a move that could reduce carbon dioxide supply crucial to the food industry and add more upward pressure on prices.
CF’s plant in Billingham, northeast England, is the UK’s main source of CO2, which is used to stun pigs and chickens for slaughter, as well as in packaging to extend shelf life and for dry ice that keeps items frozen during delivery. Natural gas is the main input for most nitrogen fertilizer, including ammonia, while CO2 is a byproduct of ammonia output.
The temporary closure, announced Wednesday, will revive memories from a year ago when CF previously stopped production in the UK, sparking chaos across the food-supply chain. Users had been urged to look for new sources of supply, although it’s not clear how much progress has been made. A repeat of that crisis could further exacerbate British food inflation that is already soaring at the fastest rate in a decade.
The UK government had an early warning over the risk to British industry from the energy crunch, but still faces a crisis from company shutdowns and reduced production. Chemical and fertilizer factories were considered particularly at risk, according to government briefings. Local natural gas futures are five times higher than a year ago.
CF originally shuttered both last September. Within days, an online grocer stopped supplying frozen products to customers due to dry-ice shortages and the meat industry warned businesses would soon grind to a halt. Temporary government aid and a deal it brokered with the industry to avert shortages had helped it reopen the Billingham plant.....
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