Potassium from Belarus back in the game?

| Foreign Markets |

The chemical sector has not forgotten the market shake-up, which happened in Belarus Potash Company (BPC) last summer. That “divorce” triggered radical changes on the market. Let us examine the current situation of Belorussian chemical-fertilizer industry in this context.

The story behind BPC split

Following 8 years of the joint-venture company, all of a sudden the Russian shareholder Uralkaliy, resigned from cooperation with Belaruskaliy. Uralkaliy decided to take over the exports of its goods using its company called Uralkali-Trading, registered in Switzerland. According to Russian explanations, the reason was the sale of potash by the Belorussians behind the back of the monopoly-holding Belarus Potash Company. In order to make up for the losses, the Russians announced they would sell potash at c. 300 USD/tonne, while BPC charged 400 USD/tonne at that time. The resulting losses for Belarus climbed to 20 billion USD.

Reviving the potential

The government in Minsk is currently striving to rebuild the international trade relations which suffered upon the BPC split. Commercial offices of Belarus and Belorussian diplomats have been urged to strive to systematize and strengthen the distribution network. Work is also under way to establish a new company, which would launch the excavation of plentiful potash deposits in the vicinity of Pripyat.

Is making-up possible?

Restoring mutual business relations is not impossible, seeing that both parties are declaring they are ready to open talks. However, President Lukashenko has made a reservation – the cooperation might be re-established on condition that the company office is in Minks. Should a new potash alliance be made, Belarus is expected to press its own terms of cooperation. The country would then be able to exert more control over the situation in the new entity.