Belarus reduces potash production
Potash fertilizer’s exports to foreign markets have reduced for objective reasons. The usual administrative levers used by the Belarusian leadership in a crisis, are useless in this case. Potash fertilizer’s production has to be cut down for the sake of potassium chloride export prices.
On December 7th, a governmental meeting about potash fertilizers’ exports took place.
In 2012 one of the main Belarusian exports, potassium chloride, may be in trouble. Potash production in January-October 2012 decreased by 6.8% compared with 2011. The projected foreign-currency proceeds at USD 3.2 billion by the year-end will not be met due to the lack of contracts with China.
There are few players at the global potash market. In order to maintain potassium chloride export prices, potash producers are prepared to cut production and to reduce exports.
In January – September 2012 exports of Belarusian potash fertilizers have been reduced in physical terms by 17.8%, while in value terms, exports fell by 14.3% over the same period in 2011. Potassium chloride price was maintained and even increased by a significant reduction in the supply volume.
Belaruskali’s partner in Belarusian Potash Company (BPC is the monopoly trader of Belarusian and Russian fertilizer producers in the world market), Uralkali, in December 2012-April 2013, will reduce the potash fertilizers’ production in order to bring the Chinese stocks down to 2 million tones. That would be the starting point for a new round of negotiations about the potash fertilizers supply to the market. The production volumes could be recovered, but not until May 2013.
Belaruskali’s performance in 2012, the global economic situation, plans of Belaruskali’s business partners, and no high-profile personnel changes in the Belaruskali’s management may imply the following. The Belarusian government, despite the need for foreign-currency proceeds and habitual adherence to administrative management style, now has to adjust to the situation and agree to a reduced production of potash fertilizers along the same lines as BPC’s partner (volume and timeframe), for the sake of maintaining the price at the current level. An alternative would be to reduce the contract price, which is unacceptable not only for the Russian partners, but also for the main market exporters.
Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.
The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.
Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.
For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.
Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.
The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.