LONDON (ICIS)--The potential impact of sanctions on Russia stemming from Moscow’s invasion of Ukraine became a vital talking point in the global muriate of potash (MOP) fertilizer market this week - particularly after the EU levelled a second wave of sanctions against Belarusian MOP exports.
Russia, Belarus and Canada are the MOP export industry’s ‘big three’ producing nations, and disruption in two of them could be disastrous for global food security - and lead to even more bullish offer prices at ports across the globe.
Top-five MOP exporting nations 2019-2021 (tonnes)
| Nation | 2019 | 2020 | 2021 |
| Canada | 19,526,292 | 21,250,960 | 21,625,128 |
| Russia | 9,354,119 | 9,524,784 | 11,832,717 |
| Belarus | 10,323,956 | 11,758,388 | 5,141,900 |
| US | 3,216,264 | 3,267,038 | 3,119,870 |
| Spain | 628,794 | 400,591 | 760,322 |
| *Source: National customs via TDM |
The EU on 2 March ratified a new set of sanctions on Belarus’ money-spinning MOP industry, effectively banning around 70% of EU MOP imports from the nation, which is ruled by Alexander Lukashenko, a long-time ally of Russian President Vladimir Putin.
The new sanctions punish Belarus’ willingness to allow Russian troops to join the invasion of Ukraine by crossing Belarusian state lines.
22 members of the Belarusian military were also targeted for sanction under the announcement.
Under the sanctions, MOP supply contracts agreed before their imposition will be included in the punitive measures - not just new contracts, as had been included in previous measures.
Companies have three months to close open supply contracts with Belarusian MOP exporter Belarusian Potash Company (BPC).
BPC was unavailable for comment.
The effect of the previous sanctions is made clear in Belarus’ export figures for full-year 2021, which more than halved after the nation’s traditional trade route to the world’s markets - via the port of Klaipeda in Lithuania - was cut off.
Belarusian MOP exports (tonnes)
| Destination | 2019 | 2020 | 2021 | Change 2020/2021 (%) |
| World | 10,303,956 | 11,758,388 | 5,141,900 | -56 |
| *Source: Belarus Customs via TDM (precise national breakdown withheld) |
Although Russian MOP exports are apparently continuing, concerns continue to mount that sanctions placed on the nation by Western powers could make trading with Russia increasingly difficult - notably because of restrictions on bank transactions.
The impact of such concerns is already being felt: in the Chinese domestic MOP market import prices for Russian MOP have spiked amid supply concerns spurred by the ongoing conflict.
Domestic availability is already tight, and importers opted to sit on inventories rather than sell in expectation of higher prices to come.
China imports around 60% of its annual MOP requirement, with Russia frequently the second-largest supplier thanks to well-established rail links.
Top 10 Chinese potash suppliers 2019-2021 (tonnes)
| 2019 | 2020 | 2021 | |
| Russia | 2,176,326 | 2,260,653 | 2,254,100 |
| Canada | 3,305,610 | 3,607,497 | 2,177,749 |
| Belarus | 1,873,666 | 1,377,238 | 1,750,277 |
| Israel | 887,263 | 786,556 | 654,629 |
| Laos | 196,044 | 127,834 | 416,627 |
| Jordan | 682,521 | 654,588 | 352,642 |
| Uzbekistan | 0 | 3,768 | 65,647 |
| Germany | 1,513 | 11,006 | 1,015 |
| US | 195 | 193 | 238 |
| Netherlands | 192 | 264 | 164 |
| World | 9,124,724 | 8,829,619 | 7,673,090 |
| *Source: China Customs via TDM |
Chemical sector end-users were heard more receptive to the increased offers, although buyers who work in fertilizers - the vast majority of the nation’s MOP consumption - pushed back against the higher prices.
Buyer resistance to the increased annual import benchmark is considerable.
China domestic potash prices CNY/tonne
| Product | 02-Mar | 23-Feb | Change |
| Russian MOP: red potash | 4,400-4,450 | 4,100-4,150 | Up 300 |
| Russian MOP: red potash - border trade northeast | N/A | N/A | N/A |
| 62% white standard MOP | 4,700-4,750 | 4,300-4,350 | Up 400 |
| 62% white standard MOP - border trade northeast | N/A | N/A | N/A |
| Canadian red potash | 4,750-4,800 | 4,350-4,400 | Up 400 |
| Canadian white potash | 4,700-4,750 | 4,250-4,300 | Up 450 |
| Dead Sea potash | 4,650-4,700 | 4,250-4,300 | Up 400 |
| Qinghai Salt Lake: 57% | Out of stock | Out of stock | N/A |
| Qinghai Salt Lake: 60% | 3,900 | 3,900 | Stable |
| Qinghai Salt Lake: 62% | Out of stock | Out of stock | Out of stock |
| SOP: standard 50% | 4,700-5,000 | 4,400-4,500 | Up 300-500 |
| SOP: granular | 4,850-5,050 | 4,550-4,650 | Up 300-400 |
Front page picture: A train loaded with
potash at a train station in Belarus in
January
Source: Xinhua/Shutterstock
Focus article by Andy Hemphill