Belarus Raises Export Duty on Potash Fertilizers 1.5 Times

As from June 1, 2011 Belarus raises the customs duty on potash fertilizers, which are exported beyond borders of the Eurasian Economic Community, 1.5 times to €75 per tonne. The decision was laid down by Belarus president decree No 179 of 4 May 2011, BelTA has learned.

The new decree amends decree No 525 "The establishment of the export customs duty on potash fertilizers" of 26 October 2009. The decision has been made to secure additional earnings of the central state budget.

A reminder, the first time Belarus introduced the export duty on potash fertilizers was in 2008 when the price for potassium chloride on spot markets exceeded $1,000 per tonne. From 1 September and till the end of 2008 a €200-duty was imposed on every exported tonne of potash fertilizers. During the crisis year of 2009 the situation on the market sharply altered. The prices for fertilizers shrank two or three times. The export duty also reduced to €50 per tonne.

This year the price for potash fertilizers on spot markets has passed $500 per tonne and continues rising. Thus, in June the Belarusian Potash Company (BPC), an exclusive exporter of Belaruskali and Uralkali products, raises the prices for transactions under CFR terms for Southeast Asia to $510 per tonne. In July 2011 BPC is expected to raise the price for potassium chloride for Brazil by $30: $550 per tonne for large importers and $560 per tonne for small importers.

Experts attribute the increase in prices to a growing demand for potassium on the major markets, increasing prices for agricultural products as well as finite reserves of the product on the market. These fundamental factors are expected to keep the global demand for potash fertilizers high during 2011.

The export duty on potash fertilizers is paid by Belaruskali, one of the world's largest and the CIS biggest producer of potash fertilizers. The Belarusian company accounts for 16% of the world potassium market. Belaruskali exports up to 80% of its produce to Europe, East Asia, the Mediterranean region, South Africa, India, China, South and North America – over 50 countries.

In Q1 2011 the export of Belarusian potash fertilizers went up by 4% from January-March 2010 to exceed 1.2 million tonnes. Deliveries to the CIS grew 56.2% to 37,100 tonnes. Export to the non-CIS states increased by 3% to 1,185,600 tonnes.