After the American sanctions that were imposed on the company in August 2021, Belaruskali had problems with the ways of supplying its products.
For six months, he successfully coped with the problem, using the territory of Lithuania for transit. Up to 10-11 million tons of potassium chloride passed through it, with a total annual production of about 12.2 million tons.
However, since February 1, Lithuania has closed its territory for transit, in connection with which the company finds itself in a difficult situation.
Yes, and the state of Belarus itself, too, because Belaruskali brings up to 10% of revenues to the country’s budget (about $ 2.4 billion a year).
Following Lithuania, the transportation of fertilizers of the enterprise was also suspended by Ukraine.
The global market for potash fertilizers, in which Belarus has a 20% share and ranks second between Canada and Russia, may also find itself in a dangerous situation.
Will Belaruskali save Russia?
As often happens, the Russian Federation is at the top of the list of countries that could come to the aid of Belarus.
Currently, the issue of shipping Belaruskali products through the territory of the Russian Federation, including through seaports, is already being considered.
Most likely, we can talk about Vladivostok or Murmansk. Although, according to the Belarusian expert Petr Petrovsky, it would be more profitable to use the Black Sea ports, in particular, the port of Novorossiysk.
And the Prime Minister of Belarus, Roman Golovchenko, admitted that the change in logistics routes will increase margins, but it should be offset by rising world prices for fertilizers.
At the moment, neither the Belarusian nor the Russian side discloses the details of the possible ways of supplying Belaruskali products. But in general, there are plans that shipments will begin as early as 2023.
At the same time, the possibility of transit using Russian Railways raises questions, since this may lead to the imposition of sanctions on Russian Railways itself, which is extremely unprofitable for the company. However, for European countries too, since there is a risk of an even greater break in the supply chains from China to the EU and an increase in prices for such products.
In parallel, Belaruskali is thinking about increasing supplies to Asian markets, such as India and China.
This is again unprofitable for the EU, since there is not enough fertilizer in Europe anyway. It may turn out to be unprofitable for Russia as well, because the Russian Uralkali is quite successfully coping with the role of a supplier of potash fertilizers to Asia and does not really need competitors.
How to resolve this situation so that everyone remains in profit is not yet clear. But the products of Belaruskali, one way or another, will eventually end up abroad, despite all the sanctions imposed.
