Belarusian potash producer Belaruskali OAO has started to ship products through Russian ports, Russia’s Kommersant reported on July 4, citing unidentified people familiar with details.
Belaruskali has signed a contract with St. Petersburg-based operator Keystone Logistics LLC to transship 2 million mt of potash in containers through 2023, according to Bloomberg, citing the Kommersant report.
Shipments will be directed through Petrolesport and Neva-Metal terminals in St. Petersburg’s Bolshoi Port, as well as through the Rybny Port in Vladivostok.
Belarus has not been able to export potash – or NPKs – via Lithuanian rail since Feb. 1 following the Lithuanian government’s decision to end 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, p. 1). The decision followed the imposition of European Union (E.U.) and U.S. sanctions on Belarusian potash trade.
For Belarus, the Lithuanian ruling meant Belaruskali and its potash marketing/export arm, Belarusian Potash Co. (BPC), lost their key potash export route, as most of Belarus’ potash for export previously was railed via Lithuania’s rail system for onward shipment from the Lithuanian port of Klaipėda.
According to this week’s report, Belaruskali and BPC are also shipping potash to China in containers by rail through Russia, shipping about 120,000 mt of potash to China last month.
These latter volumes could well be part of a Memorandum of Cooperation (MOC) BPC and China’s CNAMPGC signed in May 2019 for supplying over 500,000 mt of potash to China in containers over a five-year period from 2019 through 2023 (GM May 24, 2019).
Previous to this agreement, BPC had said it was making some 10% of its potash exports as container shipments.
Interfax this week also reported the start of Belarus potash via Russian ports, cited an earlier Kommersant report citing unnamed sources that Belaruskali/BPC has been selling product “at a 30%-50%” discount to current prices on the global market when exporting potash via Russian ports. The report could not be independently verified by Green Markets’ press time.