By Polina Devitt, Rajendra Jadhav and Roberto Samora
MOSCOW, Dec 21 (Reuters) – World potash prices could rise for a long time after the United States imposed sanctions on its main supplier, the Belarus Potash Company (BPC), increasing pressure on farmers and consumers, who already they suffer from rising costs and a world economy subjected to rising food inflation.
Fertilizer prices, which plays a vital role in crop health, were already at 13-year highs prior to the U.S. move on Dec. 2 and are expected to continue to rise, potentially slowing acreage growth. soybean planting in Brazil, the world’s largest supplier of the oilseed, according to analysts.
A pause in the increase in the area planted in Brazil would occur after several years of growth and would further boost soybean prices.
Sanctions on PCBs would make the world more dependent on other suppliers, such as Canada’s Nutrien Ltd, the world’s largest potash producer.
The company has dormant potash capacity that it could put back on the market if necessary, a Nutrien spokesperson told Reuters.
BPC did not respond to a request from Reuters to comment on the sanctions. Another major supplier, Russia’s Uralkali, declined to comment on the matter.
BPC is the export arm of Belaruskali, the second largest potash producer in the world. The United States blacklisted Belaruskali and added BPC to its sanctions list, escalating the pressure against Belarusian President Alexander Lukashenko.
Potash exports are one of the main sources of foreign exchange earnings for Minsk.
Washington gave BPC clients – including India, China and Brazil – until April 1 to close deals. The US sanctions will prevent BPC from accessing financial services in dollars, making it difficult to trade in international markets.
The prices of other fertilizers, such as urea and phosphate, have also risen this year, as the rise in the value of natural gas and coal has caused production cuts in the sector.
Reduced fertilizer input could lead to lower crop yields, at a time when food prices are at 10-year highs and are a major problem in the world.
IMPACT ON PRICES
World potash spot prices are at a 13-year high of around $ 650 a tonne, following a rebound in crop prices and a recovery in demand this year.
The maximum value of potash is from 2008, when purchases were signed at around $ 800 per tonne, said VTB Capital analyst Elena Sakhnova.
In Brazil, spot prices for potash could rise to $ 900-950 per tonne in the first quarter of 2022, up from $ 800 per tonne today, Marcelo Mello, director of the StoneX fertilizer office in Brazil, told Reuters. . The value is up more than 230% since January.
Potash is necessary for the growth of many crops, such as soybeans, rice, corn, fruits, vegetables, palm oil, and wheat. (Reporting by Polina Devitt in Moscow, Rajendra Jadhav in Mumbai, Rod Nickel in Winnipeg, Emily Chow in Beijing, Roberto Samora in Sao Paulo and Andrius Sytas in Vilna Edited in Spanish by Javier López de Lérida)