The sanctions imposed by the European Union against Belarus may have consequences for the fertilizer industry. The country is in fact one of the largest producers of potash in the world and the fertilizer is exported almost exclusively via European ports.
No immediate problems are expected in the short term. The EU has pledged that existing contracts entered into before June 25 will not be subject to the newly imposed sanction. New contracts can no longer be concluded, which means that the supply of potash will decrease in the long term. Agreements with China and India, among others - important potash importers - expire at the end of this year.
Big consequences
The Belarus Potash Company (BPC), the sales organization of the state mining company Belaruskali, informed market agency ICIS earlier this week that sanctions on potash exports could have major consequences. “The artificial and abrupt shortage in the potash market could undermine the foundations of world food security, delay agricultural development and seriously affect billions of people around the world,” BPC said before the sanctions came into effect.
Belarus has a share of approximately 20% of the global potash market and is the second largest exporter after Canada. Of the almost 10 million tons of potash that Belarus exports, approximately 97% is shipped via the European port of Klaipeda (Lithuania, photo). The total export value was more than €2020 billion in 2, of which approximately €170 million went to the EU.
Due to increased grain prices, the demand for potash on the world market has increased significantly over the past six months. Prices have risen sharply, especially in North America. In the Netherlands, potash has also risen in price by 60% since the beginning of this year, but here the increase is less extreme. Due to the sanctions, a price increase of potash in the Netherlands is certainly not excluded in the near future.