OSLO- Norway's Yara, one of the world's largest fertiliser makers, has this week begun to restart ammonia production at its sites in Ferrara, Italy and Le Havre, France, Chief Executive Svein Tore Holsether told Reuters on Friday.
Yara curtailed production in March due to the surge in natural gas prices, in another sign of rising costs for food production.
"We are restarting that now ... as of earlier this week," Holsether said.
"Food prices are up, fertiliser prices are up and as a result of that we are producing."
The two sites have a combined annual capacity of 1 million tonnes of ammonia and 0.9 million tonnes of urea fertiliser.
"We've been doing maintenance and various tasks, but of course, they've been down because of the cost ... and then when the timing was right, we were ready to restart," Holsether said.
The two outages, along with maintenance at other plants, has meant Yara's European ammonia and urea production has operated at around 45% of capacity since early March.
Yara is the world's second largest producer of ammonia with a capacity in Europe of 4.9 million tonnes per year, which in turn is used in the manufacture of urea fertilisers.
The price of natural gas, which is used in the nitrogen-containing fertiliser manufacturing process, hit record highs following the Russian invasion of Ukraine, pushing fertiliser prices dramatically higher throughout March.
The benchmark Dutch front-month gas contract hit a record intraday high of 335 euros per megawatt hour (MWh) on March 7 but came off quickly and is currently trading at 124.18 euros per MWh.
(Reporting by Nora Buli, writing by Victoria Klesty, editing by Terje Solsvik and David Evans)