The ratings on Norway-based Yara International ASA reflect its leading position as the world's largest distributor of fertilizers and producer of nitrogen; its strong cost position derived from increasing capacity in countries with low gas costs; strong geographical diversification; and its intermediate financial profile. The ratings are constrained by the high cyclicality of the ammonia fertilizer business, which is very sensitive to supply-and-demand imbalances, resulting in difficulties in passing on volatility in gas prices, the key raw material cost. Yara is also exposed to the sensitivity of fertilizers to weather conditions and farmers' income. Yara had revenues of Norwegian krone (Nkr) 45.4 billion ($7.1 billion) for the 12 months ended Sept. 30, 2005. Yara runs large-scale plants within Europe and
