![Belarus announces reduction in potash production – already seeing consequences [World News]](https://foodcom.pl/wp-content/uploads/2023/09/Foodcom_World_News_Global-1520x760.jpg "Belarus announces reduction in potash production – already seeing consequences [World News]")
- Currently, potash prices are quite low but stable. However, the Belarusian authorities believe that this is not an adequate cost for the product sold.
- President Lukashenko has proposed a 10-11% reduction in potash production by Belaruskali, the country’s potash producer. He has also floated the idea of reducing the agreement with Russia.
- The announcement has already had repercussions in the form of a rise in shares of fertiliser producers and calls towards farmers to stock up on potash for the 2025 season.
Lukashenko with proposal to raise potash prices
The Belarusian news agency BelTA has announced that the country’s president, Aleksandr Lukashenko, has proposed an agreement with Russia to reduce the production of potash fertiliser in order to raise its price. According to the president, the price of potash is far too low and a 10-11% reduction in production would allow prices to be raised without causing a shortage of potash on the market. The solution was proposed at a meeting with Andrei Rybakov, the new general director of Belaruskali – the country’s largest potash producer.
Russia and Belarus together control around 35-40% of global potash production. While Russia’s largest producer, Uralkali, is not sanctioned by the European Union and the US, Belaruskali was sanctioned in 2022. Transport by sea is particularly an issue, as Belarus is landlocked and Lithuania has prevented the country from such operations. As a result, deliveries of potash fertiliser from Belarus have fallen by around a third, and the company’s attempt to have the sanctions lifted through an EU court has failed.
Consequences of the announcement of a production cut
Currently, the price of potash remains at around a third of the peak quoted for 2021-2022. Following Lukashenko’s announcement, the shares of fertiliser producers rose. For Mosaic, Monday’s increase reached 6.2% and for Nutrien, the world’s largest potash producer, 4.7%. Shares of other producers such as Israel’s ICL Group, Intrepid Potash and Compass Minerals International also rose.
Experts and market analysts are calling on farmers to prepare for the new growing season and secure the necessary quantities of potash fertiliser. Belarus in itself should not affect the market in such a way as to shake it to a large extent, but a problem could arise if Russia and other countries follow suit. According to experts, a production cut of 10-11% by Belarus and Russia would result in a global supply cut of around 4%.
