The global fertilizer market is buzzing with news of a potential price surge as Belarus proposes a coordinated production cut in potash with Russian producers.
Belarusian President Alexander Lukashenko has suggested approaching Russian fertilizer producers to jointly reduce potash output by 10%. This bold move, reportedly made during a meeting with Andrey Rybakov, CEO of Belaruskali (Belarus’ largest potash producer), aims to lift potash prices and provide much-needed relief for the industry facing mounting economic pressures.
Lukashenko believes that this coordinated effort will highlight the value of potash, driving prices upwards. “Everyone will understand that this is an expensive product and you need to pay the appropriate amount for it,” he stated, urging Rybakov to engage in further discussions with Russian companies.
The impact of this potential move is significant, considering that Belarus and Russia together control roughly 40% of the global potash supply. While Belaruskali currently faces sanctions from the EU and U.S., Russia’s primary potash producer, Uralkali, remains unburdened, giving it greater flexibility in the market.
This proposal comes amidst a backdrop of readily available cheap potash from other markets, coupled with increased costs for the potash industry due to sanctions and market rerouting. A successful implementation of this coordinated reduction could provide much-needed support for higher potash prices, benefiting producers worldwide amid shifting trade dynamics.
The market reacted positively to the news. Mosaic shares closed Monday up 5.47% at $28.36, while Nutrien shares gained 5% to close at $50.78. This upward trend reflects investors’ optimism about the potential for higher potash prices in the near future.
