May 8, 2009 / 1:57 PM / 9 years ago

Belarus president rejects lower potash price

MINSK, May 8 (Reuters) - Belarus, home to the world’s largest potash exporter, should not accept lower prices for the soil nutrient despite a dip in demand linked to the world financial crisis, President Alexander Lukashenko said on Friday.

The Belarussian Potash Co, a 50-50 joint venture between Belaruskali and Russian miner Uralkali (URKA.MM), covers about 30 percent of world potash markets. Exports amount to over 12 million tonnes to 45 countries, led by China, India and Brazil.

Potash prices last year rose to record levels of $1,000 per tonne, but the company has faced declining demand for its production in recent months.

“We have to tell our customers in China, India and other countries that we cannot let the price drop,” the official BELTA news agency quoted Lukashenko as telling the company’s head during a visit to its mines in southern Belarus.

“We must have a proper price for potash to enable us to work in profitable fashion. We should make no concessions.”

The Belarusssian Potash Co is discussing prices with China and analysts say talks are likely to continue through the planting season. Belaruskali’s exports last year totalled 6.5 million tonnes, but are forecast this year at 5.0-5.5 million.

Potash buyers, contending with currency fluctuations and under less pressure to boost crop yields since commodity prices fell, are holding out for the lower prices seen for other types of fertiliser. [ID:nLS165599]

“We have seen a wait-and-see attitude abroad,” Lukashenko was quoted as saying. “They think we will provide fertiliser at a loss. Well, we’re not going to do that.”

This year’s spot benchmark price for potash has been set around $750 per tonne with deliveries into Brazil, where Uralkali has sold around four cargoes over the past month as inventories there have run low.

Potash fertiliser, oil products and heavy trucks are Belarus’s key exports, amounting last year to some $3.5 billion. (Reporting by Andrei Makhovsky, writing by Ron Popeski, Editing by Peter Blackburn)

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