Indian Potash Ltd. (IPL), India’s biggest potash importer, has asked JSC Belarusian Potash Co. (BPC) to disclose which ports it will use for shipments before it will sign a new potash supply deal with the company this year, according to a Bloomberg report, citing an unnamed source familiar with the matter.
Reports were circulating early this month that IPL is in talks to buy 1 million mt of potash from Belarus in 2022 by paying with rupees, according to a Reuters, citing two unidentified Indian officials (GM Feb. 4, p. 1). Sanctions imposed by the U.S. and European Union (E.U.) on Belarus restrict Belarus’ potash trade in U.S. dollars and euros.
Late last week, Russia was reported to be planning to start rail shipments of fertilizers from Belarus this year, according to an Interfax report, citing Russian Deputy Transport Minister Dmitry Zverev (GM Feb. 18, p. 1). According to the minister, it will be possible to receive an additional 2.15 million mt for the Russian railways and the same volumes for the ports this year.
Belarusian Minister of Foreign Affairs Vladimir Makei earlier that week had claimed agreements had been reached with Russia for Belarus to use Russian ports for the transshipment of potash and other Belarusian cargo, according to a BelTA report.
But like Russia’s Deputy Transport Minister, Makei did not specify through which Russian ports Belarusian potash would be shipped. Previous statements coming out of Belarus have cited the port of St. Petersburg and ports in Russia’s Leningrad region, as well as the port of Murmansk. Leningrad region ports include the Baltic Sea ports of Ust-Luga and Primorsk.
Belarus’ ability to rail potash via Lithuanian railways for export via the Lithuanian port of Klaipėda was halted from midnight on Jan. 31, following the Lithuanian government’s decision to terminate Lithuanian state-owned railway Lietuvos Geležinkeliai’s (LTG) contract to transport Belarusian potash due to “national security concerns” (GM Jan. 14, p. 1; Feb. 11, p. 1).
The move effectively blocked the export shipment of around 90 percent of Belarus’ potash, and BPC last week notified its customers that Belarus producer Belaruskali OAO on Feb. 16 told the company that force majeure conditions were forced upon it after it could not find alternatives to railing product to the Lithuanian port of Klaipėda, according to reliable sources, citing a notice from BPC.
“India’s logistical concerns show that key Asian markets may also be affected by U.S. sanctions,” said Moscow-based VTB Capital analyst Elena Sakhnova, as cited by the Bloomberg report. “Russian ports may handle the volumes instead of Lithuania, but given the sanctions risk, it is not yet clear if it will happen.”
There were reports late last week that Russian President Vladimir Putin has ordered the building of a new port near St. Petersburg to handle Belarusian potash shipments, according to a Bloomberg report, citing Belarusian President Alexander Lukashenko during a televised joint news conference in Moscow on Feb. 18. According to Lukashenko, Belarus expects to start loading “millions” of tons of cargo at the new port within 12-18 months.
Separately, according to this week’s Bloomberg report, citing the undisclosed source, IPL is negotiating with Russian banks to accept payment in rupees and transfer rupees to BPC for the last 300,000 mt of the 800,000 mt of potash deliveries under their 2021 annual contract agreement.