Yara has cut production of its most popular fertilizer by a further 200,000 tonnes by extending shutdowns at four Nordic plants, a move the group has warned may signal tighter grain markets.

The group said that the move was aimed at cutting stocks of NPK – a combination of nitrogen, phosphate and potassium fertilizer – to "minimum levels" by summer, when northern hemisphere fertilizer applications tail off.

Yara, the world's biggest producer of NPK and nitrogen fertilizers, warned in February, that it would further curtail nutrient production if demand from farmers did not rebound during the spring.

A slow recovery would "negatively affect" food production "tightening grain markets", Yara added.

Factory closure

NPK has historically been Yara's most popular fertilizer, accounting for 37% of group sales, by weight, last year.

However, Yara has also subjected NPK to the toughest production cuts since the sharp fall in agricultural commodity prices last autumn sapped farmers' appetite for maximising production in the current growing season.

The group in February said it had cut 37% of NPK capacity, including the permanent closure of a Lithuanian plant, compared with only 5% of nitrogen production.

Yara shares stood NKr3.75, or 2.6%, lower at NKr143.50 in morning trade in Oslo.

The factories where shutdowns are being prolonged are at Porsgrunn and Glomfjord in Norway and at Uusikaupunki and Siilinjarvi in Finland.