International Business News – According to Reuters, CF Industries, the UK’s largest fertilizer producer, recently announced that it will suspend operations at two of its plants in England due to the high cost of natural gas as a raw material, which means that carbon dioxide, a byproduct, will also be discontinued and the UK food supply chain is facing a new round of shocks.
CF Industries recently said it has suspended operations at two of its plants in Billingham, northeast England, and Ince, northwest England, due to soaring natural gas prices for a key raw material, halting production of its fertilizer products and carbon dioxide as a byproduct. CF Industries warned of the shutdown in late August of this year. In September last year, the company also received a bailout from the U.K. government after it shut down two major plants due to high gas prices, causing disruptions in the food supply chain in the U.K. market. But the British media reported that the British government may not come to the aid of the shutdown.
Carbon dioxide is used in a wide range of applications in the food industry, such as slaughtering animals to render them unconscious; filling bags with carbon dioxide to extend the shelf life of food; using carbon dioxide to make dry ice to keep food fresh; and filling beer and carbonated drinks with large amounts of carbon dioxide. The Financial Times reported that although CF Industries’ current share of the U.K. carbon dioxide market is down from last year’s shutdown, it still holds nearly a third of the market.
The British Meat Processors Association said the shutdown has already put pressure on slaughterers, and that even before the shutdown, wholesale CO2 prices had risen sharply. A brewer in the Greater Manchester area said the price of carbon dioxide was £250 per tonne in June this year, while it recently reached £2,800 per tonne. Many brewers have been unable to supply the number of beers originally booked by pubs and retail businesses and are losing customers, industry insiders said.