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Belaruskali Won’t Follow Uralkali’s Price Strategy, CEO Says

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Aug. 19 (Bloomberg) -- Belaruskali, the state fertilizer producer abandoned by Russian partner OAO Uralkali in July, said it won’t follow the new low-price approach of its former ally or consider a reconciliation unless the policy changes.

Belaruskali and its trading arm Belarusian Potash Co. “do not support the new strategy of Uralkali and do not agree with the price scenario Uralkali proposes,” Chief Executive Officer Valery Kirienko said today in Soligorsk, Belarus. “Uralkali’s ability to influence the market is overestimated.”

Uralkali, the largest potash producer, said July 30 it decided to end output restrictions that underpinned world prices and halt exports through Belarusian Potash, a venture it set up with Belaruskali in 2005 that controlled 40 percent of global exports. Uralkali said its plans to ramp up to full capacity may see prices sink below $300 a metric ton, from about $400 now.

“The market is dead because customers see no price bottom,” Kirienko told reporters, declining to give a price forecast. Belaruskali won’t renew cooperation with Uralkali unless the Russian producer changes its strategy or owner, he said. Belaruskali will still sell fertilizer via Belarusian Potash and may also use other traders in the “short term.”

The move by Uralkali, a company part-controlled by billionaire Suleiman Kerimov, is reverberating in the $20 billion market for potash, a form of potassium that strengthens plant roots and helps crops resist drought. The Berezniki-based producer plans to accelerate output this month, sell freely into the market and expand market share.

“This unilateral decision of Uralkali has come as a surprise to us,” Belaruskali said today in a joint statement with Belarusian Potash. Belaruskali will use scheduled maintenance stoppages at some of its sites to “help us find our bearings and assess the situation.”

Uralkali’s press service declined to comment.

To contact the reporter on this story: Aliaksandr Kudrytski in Minsk, Belarus at akudrytski@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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