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

Polish refiner PKN Orlen's Anwil subsidiary said on Monday it is resuming production of nitrogen fertilisers on food security grounds, and is hoping for government measures to support the industry as it grapples with soaring energy costs. 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 (CO2) deliveries could impact food security in the country.

Polish refiner PKN Orlen's Anwil subsidiary said on Monday it is resuming production of nitrogen fertilizers on food security grounds and is hoping for government measures to support the industry as it grapples with soaring energy costs.

Both Anwil and fellow Polish fertilizer producer Grupa Azoty halted output last week due to surging gas prices, though the food industry warned the resulting lack of carbon dioxide (CO2) deliveries could impact food security in the country. "Despite the difficult conditions on the gas market, Anwil resumes production of fertilizers and thus raw CO2. We are doing everything to make this product, used in the medical industry and for food production, available on the Polish market," PKN's Chief Executive Daniel Obajtek said on Twitter.

Anwil added in a separate press release that fertilizer prices after production resumes will reflect the current price of natural gas and market conditions. "At the same time, ANWIL expects the situation on the gas market to stabilize and the solutions supporting the fertilizer industry to be worked out," it said.

CO2 produced by chemical makers as a byproduct 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. Several European chemical companies have curtailed ammonia production due to soaring energy costs, with Norway's Yara, one of the world's largest fertilizer makers, the latest to slash its output last week.

Erste Group analyst Jakub Szkopek said that with 70% of ammonia output curtailed in Europe, fertilizer prices will likely start to rise in the region in the coming weeks. The Polish government, which is the largest shareholder in PKN with a 35.66% stake, said last week it would prepare measures to intervene in the fertilizer market after it was 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.