PKN Orlen's Anwil resumes fertiliser output, citing food security

Erste Group analyst Jakub Szkopek said that with 70% of ammonia output curtailed in Europe, it is likely that fertiliser prices will start to rise in the region in the coming weeks. Several European chemical companies have curtailed ammonia production due to soaring energy costs, with Norway's Yara , one of the world's largest fertiliser makers, the latest to slash its output last week.

Polish refiner PKN Orlen's Anwil subsidiary said on Monday it has resumed production of nitrogen fertilisers, halted last week due to a jump in gas prices, on food security grounds.

"Out of concern to guarantee the country's food security and health protection in Poland, despite difficult macroeconomic conditions, ANWIL S.A. has decided to resume the production of nitrogen fertilisers," PKN said. Both Anwil and fellow Polish fertiliser producer Grupa Azoty halted output last week due to surging gas prices, though the food industry warned the resulting lack of carbon dioxide deliveries could impact food security in the country.

Chemical makers produce CO2 as a byproduct that is used in various parts of the food industry, including to cool products during transportation, stun poultry and pigs before slaughter, and add fizz to drinks. Erste Group analyst Jakub Szkopek said that with 70% of ammonia output curtailed in Europe, it is likely that fertiliser prices will start to rise in the region in the coming weeks.

Several European chemical companies have curtailed ammonia production due to soaring energy costs, with Norway's Yara , one of the world's largest fertiliser makers, the latest to slash its output last week. Szkopek added that Anwil might be counting on some government support to offset rising gas prices. The Polish government is the largest shareholder in PKN, with a 35.66% stake.

The government said last week it would prepare measures to intervene in the fertiliser market affected by soaring gas prices. PKN and Azoty did not immediately reply to a Reuters request for comment. A spokesperson at the state assets ministry that oversees the companies was not available for comment.