Food inflation unaffected by increase in Belarus potash fertilizer prices yet - expert

<p> MINSK, Sep 24 - PrimePress. The rise in mineral fertilizer prices increases the cost of crop production and thus is transposed into the price of foodstuffs. However the situation with Belarusian potash fertilizers has not yet made a significant contribution to the food inflation, said Lyubov Arapova, advisor for vice-president of the Russian Center for Strategic Research (CSR). </p> <p>   </p> <p> “According to the World Bank, prices for potassium chloride rose 9% year-on-year in August. By comparison, urea went up in price by 79% and DAP (diammonium phosphate) by 76%. Undoubtedly, higher prices for mineral fertilizers increase the cost of agricultural crops and are then transposed into the final cost of food products,” Arapova told RIA Novosti. </p> <p>   </p> <p> “However, the existing uncertainty about the transportation of Belarusian potassium chloride does not yet contribute significantly to food inflation. Food inflation depends more on crop yields, weather conditions, prices of fuel - gas, coal - needed for transportation and production of nitrogen and phosphate fertilizers, duties and state support measures,” she said. </p> <p>   </p> <p> As previously reported, on 25 June 2021 the European Union imposed sanctions against major sectors of the Belarusian economy, including the potash mining industry, and on 9 August the sectoral sanctions were imposed by the USA, the UK and Canada. Belaruskali is one of the largest potash producers in the world. The U.S. Department of the Treasury reported that the new U.S. sanctions ordered the counterparties to wind up operations with Belaruskali by 8 December 2021. </p> <p>   </p> <p> Arapova reminded that due to the U.S. sanctions Lithuania may stop transit of Belarusian potash fertilizers from December 2021. “Previously imposed European sanctions prohibit the purchase and transportation of certain types of fertilizers, while the most popular type of potassium chloride with 40-62% content of potassium oxide is not affected by the restrictions,” she said. </p> <p>   </p> <p> In her words, the European sanctions formally allow Lithuania to transport Belarusian potassium chloride to the port of Klaipeda (as well as all the European countries to buy this type of fertilizer), but due to the U.S. sanctions Lithuanian banks tend to refuse to make payments with Belaruskali after the transition period. </p> <p>   </p> <p> Arapova added that the volume of transport of Belarusian potassium chloride through Lithuania is about 11 million tons a year. If the payment problem is not resolved, she said, part of the shipments may be rerouted through Russia. </p> <p>   </p> <p> She noted that even if Belarusian potassium chloride becomes “unavailable”, it will have a short-term effect on the global market while buyers are reoriented towards supplies from other countries. “The Belarusian fertilizer accounts for less than 5% of US imports of potassium chloride,” Arapova said. </p> <p>   </p> <p> “The main negative impact will fall on the largest importers of Belarusian potash fertilizers - Brazil, China and India - who will be forced to buy fertilizer from other producers (or use accumulated reserves, as China already does). Both Russia and other major potash-producing countries have sufficient capacity to ramp up production and meet global demand," Arapova said. End </p>

2021-09-25

Primepress