UK gas prices could cause food shortages in a matter of weeks

based in Illinois CF Industries (CF) said last week that it would cease operations at its two UK plants indefinitely because of the high price of natural gas.

Those According to the British Meat Processors Association (BMPA), which warned on Friday that the supply shock could lead to food shortages within 14 days once current CO2 supplies are in place Run out of gas.

The gas is used to stun animals for slaughter and in packaging to extend the shelf life of fresh, refrigerated and baked goods and in the production of carbonated beverages.

BMPA chief Nick Allen told the BBC on Saturday that he has been “flooded” with calls since the factories closed. “Retailers are really concerned about this,” he added.

“This crisis underscores the fact that the UK food supply chain is at the mercy of a small number of large fertilizer manufacturers (four or five companies) across Northern Europe,” Allen said in a statement.

To underline the pressure on the industry, another European fertilizer manufacturer, Norway wound (YARIY), said on Friday that it would cut its ammonia production in Europe by around 40% because of “record high natural gas prices” – including at a British plant.

“At the moment it is unprofitable to produce ammonia in Europe,” Yara CEO Svein Tore Holsether told CNN Business on Monday. He said the company, which is monitoring the situation on a daily basis, will temporarily rely on ammonia production in other parts of the world. Yara’s Hull plant does not produce any CO2.

The UK retail consortium on Monday called on the UK government to ensure sufficient CO2 supplies to food producers and “avoid significant food disruptions”.

UK Economy Secretary Kwasi Kwarteng met CF Industries CEO Tony Will on Sunday to discuss the crisis. “We discussed the pressures the company is facing and explored possible ways to secure vital supplies, including for our food and energy industries.” Kwarteng tweeted.

The UK government official should also meet with energy industry leaders on Monday amid fears that many gas and electricity utilities could go bankrupt if wholesale prices rise and business and residential customers are left without reliable supplies.

A government spokesman told CNN Business on Monday that officials are closely monitoring the situation and are in regular contact with food and farming organizations.

The looming CO2 shortage is having a hard time Time for UK food producers already grappling with acute truck driver shortages and tangled supply chains. The British Poultry Council warned on Friday of a threat to national food security if the government does not support CO2 production in the run-up to Christmas.

“With less than 100 days to Christmas and an already increasing labor shortage, the last thing UK poultry production needs is more pressure,” said Richard Griffiths, CEO of the British Poultry Council, in a statement.

“It’s no longer about whether Christmas will be a good one, but about keeping the wheels running and the lights on so that we can actually come to Christmas.” Richard Walker, executive director of the Iceland Foods supermarket chain, told the BBC on Monday. “This is not an issue months away.”

UK natural gas prices rose 420% on an annual basis in September, according to S&P Global Platts. Elsewhere in Europe, too, gas prices are rising sharply, due to exhausted stocks, competition with Asia for liquefied natural gas and low deliveries from Russia.

But the problem is particularly acute in the UK, where supply shortages have been exacerbated by the lack of large storage facilities and significantly lower UK production this year due to an extensive schedule of planned maintenance and delays in new projects, S&P Global Platts said in one Research note last week.

– Julia Horowitz contributed to the reporting.


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