LONDON (ICIS)--Belarus Potash Company (BPC) has warned potential EU sanctions on muriate of potash (MOP) fertilizer exports could have a wide-ranging impact on global food security.
BPC, the marketing arm handling MOP produced by state-owned mining firm Belaruskali, said in a written response to ICIS that sanctions on MOP exports could “provoke a global collapse" in fertilizers and agriculture markets.
The EU did not explicitly state sanctions will be placed on exports of MOP from Belarus, but market players expect such restrictions will be imposed.
“We suggest not to speed things up,” said BPC.
"At the moment, there are no sanctions against [the] Belarusian potash industry. We are working as usual, and fulfil our current commitments."
The company went on to describe the potential effects of those sanctions on the global potash market. It said the lack of Belarusian material would cause "under-application of fertilizers to soil" and a decrease in crop yields, ultimately causing an increase in food prices.
Belarus is one of the world’s largest MOP-producing nations, second only to Canada; producing approximately 12m tonnes/year of the potassium-rich fertilizer - around 20% of global supply.
BPC did not respond to questions on how potential EU sanctions would hurt its own finances, as potash is the company's main source of income; nor whether it is making contingency plans.
BPC concluded should sanctions be imposed, “such [a] potential scenario will hurt the well-being of ordinary farmers and industrial producers" globally.
“The artificial and abrupt tightness of potash on the market would undermine the foundations of global food security, undoubtedly slow down the development of world agriculture and seriously hit billions of ordinary people around the world.”
BPC’s comments come after the EU took aim at MOP - one of Belarus’ key exports - as it prepares to slap a fourth round of sanctions on the nation and its President, Alexander Lukashenko.
The EU Council - 27 national governments - announced sanctions against 78 individuals and eight entities, including a ban on travel to the EU, and the freezing of assets.
“These sanctions … send a further strong signal to the backers of the regime, that their continued support for Alexander Lukashenko comes at a substantial cost,” the EU said.
Included in the list is billionaire Mikhail Gutseriev, owner of the diverse Safmar, Slavkali, and Slavneft companies.
Slavkali is lead on the development of Belarus’ Nezhinsky MOP mine, which is also being supported by 10 Belarusian firms.
The potential sanctions follow the contentious diversion of a passenger plane in Belarusian airspace and the removal of activist and journalist Roman Protasevich from a Ryanair flight.
This week ,the US, Canada, and the UK also issued a statement hinting at potential sanctions against Belarus.
“We are committed to support the long-suppressed democratic aspirations of the people of Belarus and we stand together to impose costs on the regime for its blatant disregard of international commitments,” the three countries said.
Front page picture source: Alexander Zemlianichenko Jr/AP/Shutterstock
Additional reporting by Jonathan Lopez