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Potash war heats up with the arrest of Uralkali CEO in Belarus

From Argus FMB Potash,  29 August 2013

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The news that broke on Monday 26 August that the CEO of Uralkali, Mr, Baumgartner, had been arrested when returning to the airport in Minsk after a meeting at the invitation of the Prime Minister of Belarus, has taken the dispute to a new level. In addition, the official news sites in Belarus said that applications had been made to Interpol to issue warrants for the arrest of four other Uralkali employees. However, Argus FMB has examined Interpol’s website where you can search for the names of wanted persons and so far none of the four names comes up.

Angry diplomatic protests have been issued by Russia and two lines of economic sanctions are being put into place although they are not technically being linked to the arrest. In the first place, oil supplies from Russia to Belarus could be cut by 25% from 1 September in order to conduct some maintenance on the pipework it is said.

In the second place, milk imports from Belarus into Russia have been halted after Gennadi Onishchenko, the head of the Russian consumer protection agency, said Belarusian’s milk products do not comply with Russian rules. He recommended to restrain from consuming them. Indeed there are reports that imports have stopped already. This is a typical move by Russia to damage other countries’ economies. Milk is apparently the third most important export for foreign exchange in the Belarusian economy.

Meanwhile it has to be said that the move has not gone down well with many potash buyers around the world, some of whom are questioning whether they can trust supplies from a country where such an action is taken. In India, where a Belarusian delegation has been visiting for over a week, some buyers made their feelings clear to them on this score.

Meanwhile, only one additional piece of spot business has come to light since last week and that is in Brazil, where import demand is traditionally at its peak in the third quarter. The $370-380/t cfr range for granular MOP for big-small buyers reported last week for Uralkali’s sales is understood to have held in a cargo booked by K+S Kali this week. 

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