Potash prices will likely remain high into the new year given U.S. sanctions against Belarus Potash Company (BPC). Global spot prices for potash are at 13-year highs around $650 per MT after a spike in crop prices and a demand recovery this year.
In Brazil, spot potash prices could rise to $900 to 950 per MT in the first quarter of 2022 from $800 per MT now. They have already jumped more than 230% since January. India’s potash consumption and imports may fall if potash prices rise further due to the sanctions on BPC. The company typically agrees to annual supply contracts with India with the most recent deal signed in January 2021. China gets 20% of its potash imports from Belarus and prices in the world’s largest consumer are also high, despite the recent release of some of its potash reserve.
Transportation of potash out of Belarus might become an issue. Currently Lithuania continues to transport potash under existing contracts and pre-payment in December and part of January. Russia, a Belarus ally, does not have enough extra shipping capacity to handle the 12.5 MMT per year.
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