US slaps sanctions on Belarus potash supplier

The US administration today imposed sanctions on Belarus' Belaruskali marketing arm Belarus Potash (BPC), blaming Minsk for creating a migration crisis on the EU-Belarus border.

State-owned potash producer Belaruskali was already on the US sanctions list, with US companies given until 8 December to wind down business dealings with that parent company. Today's sanctions announcement by the Treasury Department sets 1 April 2022 as a deadline for US companies to end business dealings with BPC, as well as with its subsidiary Agrorozkvit and any firms in which BPS and Agrorozkvit hold a stake of more than 50pc.

The sanctions announced today would affect only US-based entities' ability to work with the Belarusian companies. But in practice, appearing on the US sanctions list also limits the targeted firms' access to the US dollar-based financial system and thus has an unstated extra-territorial effect.

Industry participants had already anticipated the cessation of Belarusian MOP imports next week as prior sanctions against Belaruskali posed significant financial challenges for US imports via BPC. Belarusian MOP tons in recent years have accounted for roughly one-third of offshore imports to the US, making the likely loss of Belarusian tonnage headed into 2022 a key driver of bullish market sentiment this quarter as a strong fall application season was expected to boost demand ahead for winter tonnage. But higher MOP values continue to fuel concerns for springtime consumption losses, potentially dampening the effect of lost BPC shipments.

Treasury separately prohibited US banks and companies from dealing with new sovereign debt obligations issued by the Belarusian government and state-owned Development Bank of Belarus.

By Haik Gugarats and Jasmine Davis