Potash supply disruptions in Belarus and Russia have lifted prospects for producers elsewhere
By Jinjoo LeeFollow April 14, 2023 5:30 am ET The Wall Street Journal
Potash, a potassium-based fertilizer mined from the ground, came into sharp focus last year when prices reached record highs following supply disruptions from Belarus and Russia. Some see it as a key commodity not just for agricultural production but also combating global warming.
Now potash producers elsewhere—most notably in Canada—are seeing an opportunity to grab market share. BHP, the world’s largest miner, sees the fertilizer as one of the keys to its future. Will their potash bets pay off?
Potash prices in Brazil, the world’s largest importer of the fertilizer, spiked to a record high of $1,180 a ton in April 2022, 250% above the trailing-five-year average. That was quite the reversal for potash prices, which had been stuck in a rut for at least a decade because of a capacity glut. The supply disruptions from Belarus and Russia, which together typically produce 40% of the world’s potash, were to blame. Both the U.S. and the European Union started imposing sanctions on Belarus’ state-run potash producer in 2021 following a disputed presidential election, and they tightened those restrictions in 2022 in response to Belarus’ involvement in Russia’s invasion of Ukraine. On top of that, Lithuania started banning the transport of Belarusian potash last year, eliminating a key export route. Belarusian exports were down by about 70% last year, according to an estimate from analyst Allan Pickett of S&P Global Commodity Insights. And while there were no direct sanctions imposed on Russian potash, restrictions on export-enabling activities such as banking and shipping have affected supply from there. Continue reading the full article from The Wall Street Journal
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