Belaruskali Plans Brazil Expansion After Split From UralkaliPeter Millard
Belarus’s state-run fertilizer producer is looking to increase potash exports to Brazil after a former partner scrapped output restrictions.
Belaruskali plans to build ports in northeastern Brazil to supply growing fertilizer demand, Director General Valery Kiriyenko said in an interview yesterday. The Minsk-based company already sends as much as 20 percent of its output to Brazil and expects the biggest coffee-producing nation to increase purchases as farming activity grows, he said.
“We are in Brazil looking for business, looking to assist one of the biggest customers we have,” Kiriyenko said by phone from Sao Luis in Maranhao state. “Our main plan is to deliver high-quality products to the Brazilian market.”
OAO Uralkali, the potash producer that suspended a venture controlling almost half of global exports, forced Belaruskali to approach its main customers, Kiriyenko said. He met with Brazilian Energy Minister Edison Lobao July 30 to discuss port projects and is negotiating a partnership with Sao Paulo-based Sertrading to import and distribute products, he said.
Brazil imports more than 90 percent of its potash needs and 75 percent of its nitrogen-based fertilizer supplies, according to industry association ANDA. The country is expected to become the world’s biggest soybean producer and exporter this crop season, surpassing the U.S.
“Brazil has big plans to increase agriculture, which will cause a higher production of fertilizers,” Kiriyenko said, speaking through a translator. Potash is a crop nutrient that strengthens plant roots and improves their resistance to drought.
Uralkali split from Belaruskali because a strategy of pursuing “price over volumes” doesn’t work if one partner sells independently, its Chief Executive Officer Vladislav Baumgertner said in an interview in Moscow yesterday.
The expected output increase has sent shares of producers tumbling. Uralkali fell 24 percent in the two days after announcing the end of export controls while Potash Corp. of Saskatchewan Inc. slumped 23 percent and Agrium Inc. lost 7 percent.
Kiriyenko said it’s difficult to predict the impact the end of production restrictions that underpinned global prices will have on Brazil’s fertilizer market.