EU confirms sanctions on Belarus’ potash sales

LONDON (ICIS)–The EU Council has imposed sanctions on exports of muriate of potash (MOP) fertilizer from Belarus, ratifying threats of action made earlier in the week.

The sanctions on MOP would imply no country in the 27-nation bloc can trade MOP with Belarus.

Belarus Potash Company (BPC), the marketing arm handling MOP produced by state-run mining firm Belaruskali, is a major exporter to the EU and uses the port of Klaipeda, in Lithuania, as a gate to global markets.

The sanctions would effectively cut BPC off that key route.

“Trade in petroleum products, potassium chloride (‘potash’), and goods used for the production or manufacturing of tobacco products is restricted. Furthermore, access to EU capital markets is restricted,” said the EU.

Of the nations bordering landlocked Belarus, only Ukraine, Russia and Moldova are not members of the EU.

It is as yet-unclear what effect the sanctions will have on BPC, and Belaruskali’s, future plans.

BPC had not responded to a request for comment at the time of writing.

AROUND 20% OF GLOBAL SUPPLY
Potash market players were left wondering on Thursday what the options aree for BPC, which markets around 20% of global potash supply.

A source at one European MOP producer wondered if BPC could produce nitrogen, phosphorus, potassium (NPK) fertilizer blends to skirt the ban on straight MOP trade.

A second source at another European producer pondered if Russian President Vladimir Putin may step in to assist traditional ally Belarus by opening Russian ports to Belarusian MOP tonnes.

That solution, however, would be difficult given the intense potash trade out of Belarus: “Such volumes also impossible to ship,” said the second producer.

BPC previously warned EU sanctions on MOP fertilizer exports could have a wide-ranging impact on global food security.

With the sanctions’ official confirmation, the effects of the ban on MOP trade may soon become clear.

Market players expect increased offer pricing at ports in southeast Asia and Latin America in coming weeks, as buyers scramble to secure their requirements.

Front page picture: The EU Commissioner for the economy, speaking to reporters in Brussels; archive image
Source: Francisco Seco/POOL/EPA-EFE/Shutterstock