What the lifting of US sanctions means for Belarusian potash
The USA announced the lifting of sanctions on Belarusian potash. We asked an expert what this could actually mean for Belaruskali.
Positive news, with limitations
The lifting of US sanctions became known after Lukashenka's meeting with Trump's special envoy to Belarus, John Coale.
Meanwhile, the Lithuanian Ministry of Foreign Affairs later stated that no discussions are underway in the European Union regarding the easing of sanctions against Belarus, which is a very important factor in the case of Belaruskali.
“Since neither in the European Union as a whole, nor in Lithuania in particular, are there any talks about lifting sanctions on Belarusian potash, the issue of logistics remains relevant.
Moreover, the European Union is important for Belarusian potash not only from a logistics point of view, as it accounted for no less than a third of the total export volume,” says BEROC expert Anastasiya Luzgina.
For comparison, the USA accounted for only about 4-4.5% of Belaruskali's exports in 2019-2020.
“Given the not-so-best relations between the USA and Canada, the Americans' lifting of sanctions on Belaruskali opens access to the US market. Therefore, it can be assumed that Belarusian potash could partially replace Canadian potash. But this is a very distant market, so the question will be how profitable it will be to supply products there under conditions where delivery via Klaipėda remains impossible,” notes the economist.
Nevertheless, Luzgina still calls such a step by the US important for Belarus, as the potash industry is significant for the economy.
Working with third countries will become easier
Furthermore, the lifting of US sanctions on Belaruskali may have a certain positive impact on exports to other countries.
“It must be understood that sanctions from the US meant not only that American consumers could not purchase potash from Belarus, but also that banks could not conduct operations in US dollars for the benefit of Belaruskali's clients.”
That is, transactions in dollars were not possible; some schemes had to be devised. Now, with no sanctions, the need for additional schemes disappears. Therefore, such simplifications in the financial sector are a plus for exports.”
According to the expert, improvements in financial logistics can become the main positive factor. This simplifies potash supply opportunities and, in some cases, makes them cheaper.
The EU is more important for Belarusian potash than the USA
Nevertheless, this does not fully solve the problem, as Belarusian potash still cannot be supplied to the European Union, nor can Lithuanian ports be used for deliveries to third countries.
Moreover, access to European ports is important not only for deliveries to the United States, but also to India and China.
“This would immediately reduce the cost of products, so a reduction in logistics costs could also positively affect Belaruskali's profit,” notes Luzgina.
What was the outcome of the overall sanctions?
Overall, due to sanctions from the EU and the USA, the share of Belarusian potash in the world market decreased from 20% in the pre-sanctions period to about 6% as of 2024. These figures clearly reflect how painful and global the restrictions on Belarusian potash have been.