Potash producer action advances with US sanctions against Belarus exporter

Overview shows a pile of garbage at the Belaruskali potash mine near the city of Soligorsky

MOSCOW (Reuters) – Shares of global potash producers rose on Thursday after the United States imposed sanctions against an exporter to Belarus, which accounts for 16% of global output, along with sweeping sanctions against other companies in the country.

The Belarus Potash Company (BPC) is the export arm of Belaruskali, the state-owned potash producer of Belarus and the main source of foreign exchange for the capital Minsk. BPC mainly sends potash to China, India and Brazil.

The US Treasury said on Thursday it had issued a general license authorized to close transactions involving BPC by April 1.

“While there is a high chance that the license will be extended … some customers will still try to avoid new business,” VTB Capital said. “It is extremely important to see how willing China and India are to sign new contracts (with BPC).”

BPC, whose supplies are currently managed by the port of Klaipeda in Lithuania, did not immediately respond to a request for comment from Reuters. BelarusKali was approved in August, with its deadline to cease operations expire on December 8th.

VTB Capital says Belaruskali is the world’s second largest producer of the nutrient after Nutrien, with 12.5 million tonnes of potash to be produced in 2021.

Nutrien shares rose 3.4% in Toronto, while Mosaic shares in New York rose 3.9%.

(Reporting by Polina DeWitt, Rod Nickel in Winnipeg and Daphne Saledakis in Washington)

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