Belarus said it is set to complete the purchase of the Russian multipurpose sea cargo transshipment complex MSCC Bronka in the port of St. Petersburg this year, according to Belarusian state-owned national news agency BelTA, citing Belarus’ Minister of Transport and Communications Aleksey Avramenko. “The minister said the deal “is in the works,” and he expects it will be completed “in the near future.”
State-owned potash producer Belaruskali OAO signed a contract last June with St. Petersburg-based operator Keystone Logistics LLC to transship 2 million mt of potash in containers via the Bronka terminal through 2023, according to Bloomberg, citing a Kommersant report (GM June 24, 2022).
According to this week’s BelTA report, citing the minister, Belarus already is using the Bronka terminal to transship its “main export items.”
Belaruskali and BPC last July were reported to have started to ship products through Russian ports, according to a Kommersant report, citing unidentified people familiar with details (GM July 8, 2022). But the report did not name the specific ports being used.
Bronka is the only deep-water terminal in the port of St. Petersburg and can accommodate vessels of up to 13 meters draft. It is served by a nearby rail link. As of today, the terminal is able to handle annually about 1.9 million TEUs and over 200,000 units of vehicles and special equipment, according to the report.
Belarus last month also reiterated its aim of building a terminal in the Russian port of Murmansk to handle Belarusian potash and Belarusian fertilizers.
According to an Interfax report, citing Belarusian president Alexander Lukashenko, speaking at a February press conference, implementation work has begun.
Design work for a Belarusian fertilizer terminal in the port could begin on the western bank of the Kola Bay in 2023, with two optimal sites already selected, according to Murmansk Region Governor Andrey Chibis, also cited by the report, speaking late last year.
According to Chibis, “under an optimistic scenario,” construction of a terminal with an annual handling capacity of 5-7 million mt could begin in 2024.
Belarus has not been able to export potash – or NPKs – via the Lithuanian port of Klaipėda since Feb. 1, 2022, after Lithuania’s government terminated the railway transit contract between the country’s state-owned railway company Lietuvos Geležinkeliai’s (LTG) and Belaruskali over national security concerns (GM Jan. 14, 2022).
The Lithuanian government decision came in the wake of European Union and US sectoral sanctions on Belarus, which included, among other things, a ban on the trading and transit of potash.
Lithuania’s decision blocked Belarus’ key export route. Most of Belarusian potash exports up until that time were railed via Lithuania’s rail system for onward shipment from the country’s Klaipėda port.
Since then, Belaruskali and its potash marketing/exporting arm Belarusian Potash Co. (BPC) have sought to secure other routes to market. The Belarusian authorities have repeatedly emphasized the need “to make the maximum use of Russian ports” to ship Belarus’ goods.
But Belarus is also looking to China as it seeks more help for its sanctions-hit economy. The Belarusian president traveled to Beijing for a three-day state visit this week and held talks with China’s President Xi Jinping in a move to further cement the partnership between the two countries. As Moscow’s closest ally, Lukashenko has at the same time been endorsing Beijing’s efforts to play the peacemaker in the Ukraine war.
China is traditionally one of Belarus’ top three trade partners, and trade agreements were high on the agenda for discussion, according to a BelTA report, citing Belarus’ First Deputy Prime Minister Nikolai Snopkov.
Speaking to the news agency about trade, the minister drew attention to potash as a product of strategic importance.
Snopkov confirmed that negotiations are in progress between Belarusian companies and the main Chinese importers to discuss volumes and prices.
BelTA reported that Snopkov was not willing to discuss concrete figures, but he did promise a “substantial increase in volumes,” noting “how important food is and how important the potash fertilizers our country has are.”
In an attempt to mitigate the loss of shipping via the port of Klaipėda, Belarus last year was reported to have increased “substantially” its exports to China by rail in 2022, which included more than 1 million mt of potash, according to an Interfax report on Jan. 5, citing Belarus Transport and Communications Minister Alexei Avramenko, as quoted by BelTA (GM Jan. 6, p. 28).
Even so, Nutrien is among those international suppliers that do not believe there have been any “material improvements” in the volume of potash exported since sanctions on Belarus and restrictions on Russia were put in place around a year ago.
“Belarus’ supply in particular remains constrained, with shipments in recent months reported to be down more than 50% from the prior year,” Nutrien President and CEO Ken Seitz told analysts at a company earnings call on Feb. 16. “This illustrates the importance of having reliable access to tidewater ports, and the challenges associated with reworking distribution channels for a bulk commodity like potash.”
The Mosaic Co. also sees Belarus potash exports at half pre-sanctions levels, the company said at a company earnings call on Feb. 23.
Belarus no longer reports export data. Based on year-to-date import data (some December import data is not yet available), imports of potash from Belarus for 2022 show a 57% decline over 2021, to 3.977 million mt from 9.267 million mt, according to Trade Data Monitor.
Based on the import data, though not final, Green Markets’ Research Director Alexis Maxwell estimates that Belarusian 2022 potash exports will be some 4.3-4.5 million mt.
Belarus’ exported 11.8 million mt of potash in 2020, according to Trade Data Monitor. Almost 10.7 million mt of this total was shipped via the Biriu Kroviniu Terminalas (Bulk Cargo Terminal [BKT]) terminal in Klaipėda port, according to LTG (GM July 2, 2021). Belaruskali owns a 30% stake in the BKT terminal.