Annex to the aide-memoire “Negative impact of sanctions against Belarusian potash fertilizers on global food security”
Statistics provided by United Nations agencies show that the situation of hunger in the world continues to worsen.
Today, more than ever, it is necessary to concentrate joint efforts on eliminating as soon as possible all factors affecting the spread of hunger.
Belarus has always made a significant contribution to global food security. The country has exported agricultural products and food to more than 100 countries around the world. However, the illegal sanctions policy of Western countries against Belarus is leading to extremely negative consequences for global food security. Belarus has repeatedly drawn attention at various levels and platforms to the fact that such unilateral coercive measures by Western countries increase food risks.
Fertilizer affordability
A July 3, 2023 report by the Food and Agriculture Organization of the United Nations (FAO) calls for “every effort to keep international markets and trade in food and fertilizers open. Supply chains … and all logistics and marketing systems must be kept functioning.” The paper concludes that despite falling prices, “the affordability of fertilizer remains a major concern, especially in low-income countries such as sub-Saharan Africa, which also affects delivery and logistics costs.”
The same conclusion is contained in an article by the International Food Policy Research Institute (IFPRI) dated March 9, 2023 . It states that although international prices declined during 2022 and into 2023, fertilizer “remained unaffordable in many African countries due to persistently high domestic price inflation. Even without price pressures, fertilizer prices in Africa tend to be higher than in the rest of the world, given the still significant transport infrastructure and regulatory bottlenecks.”
This conclusion is further supported by the discussion at the UN Food Systems Summit +2 Stocktaking Moment held at FAO from 24-26 July 2023. African countries speaking at the special event “Fertilizers: Meeting short-term needs and working towards sustainable solutions” reiterated the high prices of fertilizers in the region, which they believe significantly limits farmers' access to them. They claimed that there are millions of hungry people in the region. At the same time, EU representatives did not dispute the existence of unilateral coercive measures on food and fertilizers and their impact on world hunger, but called for other ways to increase global food production (innovative technologies, healthy diets, etc.).
Potash prices, and hence their availability to farmers in the European market in 2022, have remained extremely high for a long time, both well above historical levels for the region and long behind the downward price trends that started in other global markets around July 2022.
According to Argus, the price of granular potash in Europe reached €950 per tonne by April 2022 and remained above €800 per tonne for almost the rest of 2022. By June 2023, it had fallen to €440 per ton, but was still above the June 2021 level of €215 per ton. At the same time, Brazilian granular potash prices (peaking in April 2022 at US$1,023 per ton) began their active decline as early as July 2022 (US$975 per ton) and fell to US$530 by the end of 2022.
Thus, potash prices in 2023 are higher than in 2021 (the period before the introduction of restrictive measures against Belarusian potash). Despite some drop in prices, affordability for farmers, especially in Africa, is still low.
Belarus' share in African potash fertilizer markets
In 2021, 1.8 million tons of potash fertilizers were exported to African countries, including 683 thousand tons of Belarusian potash fertilizers, which accounted for 38% of total exports in physical terms. At the same time, Belarusian Potash Company was the only supplier of potash fertilizers in a number of African countries (Zambia, Sierra Leone, Gabon, Chad, Madagascar), while in some other countries (Cameroon, Zimbabwe, Tanzania) the market share of Belarusian Potash Company exceeded 90%.
Analysis of customs statistics data of African countries notes a significant decrease in the volume of potassium chloride imports after 2021. For example, in the first 5 months of 2022 and 2023, Morocco imported 55.4 and 52.3 thousand tons of potassium chloride, respectively. During the same period in 2021, 206.6 thousand tons of potassium chloride were imported. Such a significant decrease in the volume of imports of this commodity occurred, with a high probability, due to the elimination of JSC “BPC” from the number of suppliers.
Of the 1.8 million tonnes of potash fertilizers supplied to Africa in 2021, only 218,000 tonnes were supplied cumulatively from EU countries (Germany, Spain, UK) and Israel, representing no more than 12%. The remaining volumes were supplied from Belarus (38%), Jordan (20%), Russia (20%), Chile (6%) and Canada (5%).
Importance of potassium in agriculture
Fertilizer supply and affordability affect crop yields. A World Bank report states that “crops are directly dependent on fertilizers.”
Potassium has a direct impact on crop productivity (yield) .If potassium is insufficient, it reduces plant growth and lowers yields. That said, as noted in an IFPRI article dated March 9, 2023, the possible effects of reduced potassium intake on crop yields and soil health can take several years to manifest themselves.
Potassium is the nutrient that increases plant resistance to various stresses, including climatic stresses: drought, high temperatures, frost, overwatering, pests and diseases, soil salinity.
As stated in the EU document, potassium is one of the three most important macronutrients required for plant growth and currently has no cost-effective substitutes .
Only with balanced application of nitrogen, phosphorus and potassium fertilizers, in scientifically justified doses, it is possible to obtain maximum crop yields. Exclusion of at least one of these three basic elements from the fertilizer system will result in lower yields and consequently have a negative impact on production and food security.
The current scarcity of potash fertilizers on world markets reduces crop yields, which may cause a sharp rise in food prices.
The EU sanctions documents state that the EU seeks to prevent its sanctions from affecting food security. To this end, quotas have been set for the supply of Russian potash to the EU, and official explanations have been given that its supply to third countries, including transit through the EU, should not be hindered in any way.
However, the EU sanctions measures against Belarusian potash, introduced in 2021, do not have any exceptions, which directly affects the global trade in potash fertilizers.
The EU High Representative for Foreign Affairs and Security Policy, Joseph Borrell, acknowledged that “pre-war sanctions against Belarus on potash exports could affect the global distribution of the product” and that they have heard “concerns from some African leaders about the impact of [EU] sanctions.”
Growth opportunities for the global potash market
According to statistics from the International Fertilizer Association (IFA), global potash production in 2022 was 60.7 million tons and decreased by 12.4 million tons or 17 percent from 2021. In the June 2023 forecast, IFA estimates that global potash production in 2023-2027 can grow by 16.9 percent from 2022 levels. At the same time, potash capacity is expected to increase by 11.2%.
According to the U.S. Geological Survey (USGS) Mineral Commodity Summaries, most of the growth will come from new mines and projects in Belarus, Canada and Russia. New mines will be developed in Australia and Eritrea. A polyhalite mine (a raw material for fertilizer production) in the UK will also contribute to capacity additions. New mines in Brazil, Canada, Ethiopia, Morocco, Spain and the US are not expected to be operational until 2025.
These facts lead to the conclusion that it is not possible to compensate in 2023 or 2024 for the volume of Belarusian potash that is currently not entering the market due to restrictive measures.
Belarus calls for the rejection of unilateral coercive measures against Belarusian potash, which have a negative impact on global food security, as well as contradict international commitments, including in the framework of the implementation of the 2030 Agenda for Sustainable Development, and run counter to the provisions of the UN Charter and relevant UNGA resolutions.
