What the lifting of US sanctions means for Belarusian potash

Positive with limitations

The lifting of American sanctions became known after Lukashenka's meeting with Trump's special envoy to Belarus, John Koole.

At the same time, the Ministry of Foreign Affairs of Lithuania later stated that there were no discussions in the European Union regarding the easing of sanctions against Belarus, which is a very important factor in the case of "Belaruskali".

"Since there are no discussions in the European Union in general, nor in Lithuania in particular, about lifting sanctions on Belarusian potash, the issue of logistics remains relevant.

At the same time, the European Union is important for Belarusian potash not only from a logistical point of view, as it accounted for at least a third of the total export volume," said BEROC expert Nastassia Luzgina.

For comparison, the USA accounted for only about 4-4.5% of "Belaruskali" exports in 2019-2020.

"Against the backdrop of not the best relations between the USA and Canada, the Americans lifting 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 Klaipeda remains impossible," the economist notes.

Nevertheless, Luzgina calls such a step by the USA important for Belarus, as the potash industry is significant for the economy.

It will be easier to work with third countries too

In addition, the lifting of American sanctions on "Belaruskali" may have a certain positive impact on exports to other countries as well.

"It must be understood that sanctions from the USA meant not only that American consumers could not buy potash from Belarus, but also that banks could not conduct operations in US dollars for "Belaruskali" clients."

Павялічыць

That is, payment in dollars was impossible; they had to invent some schemes. Now, when there are no sanctions, the need to use additional schemes disappears. Therefore, such simplifications in the financial sector are a plus for exports."

According to the expert, improvements in financial logistics may become the main positive factor. This simplifies the possibilities for potash supplies and makes them cheaper in some places.

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, and Lithuanian ports cannot be used for supplies to third countries.

Moreover, access to European ports is important not only for supplies to the States themselves, but also to India and China.

"This would immediately reduce the cost of production, so a reduction in logistics costs could also positively affect "Belaruskali's" profits," notes Luzgina.

What was the result of the general sanctions?

Looking at it, due to sanctions from the EU and USA, the share of Belarusian potash in the world market decreased from 20% in the pre-sanction period to about 6% as of 2024. These figures clearly reflect how painful and global the restrictions on Belarusian potash were.

• 12
• 2
• 2
• 4
• 1
• 2
• 3
• 0