Poland's state-run fertilizer producer Grupa Azoty SA has temporarily stopped taking new March orders for nitrogen fertilizers as Middle East tensions drive up gas prices, a key production input. The company will continue existing production but says accepting orders under current conditions would expose it to negative consequences.

Azoty, the EU's second-largest nitrogen fertilizer producer, made the decision amid soaring gas costs and disruptions to Persian Gulf shipping routes. The war in Iran is already pushing up prices at a critical time when Northern Hemisphere farmers prepare for spring planting. Unlike some competitors, Azoty has chosen not to immediately raise prices for its partners.

Fertilizer producers in Egypt, Algeria, China and the US have already raised prices by $45-$70 per ton. Azoty's shares slumped nearly 4% in Warsaw trading. The company was already struggling with debt from building Europe's largest propylene and polypropylene complex and facing fierce competition from Russia and Belarus.