04-09-2012 09:41 Belarus
Belarus, Russia compromise on potash export
Shareholders of the Belarusian Potash Company (BPC) represented by OAO Uralkali and OAO Belaruskali reached an agreement on the prospects and the principles of establishing Soyuzkali – a joint trading company to promote potash fertilizers on overseas markets.
BPC press-secretary Filipp Gritskov made a statement to that effect in an interview with Prime-TASS on Monday.
The parties have made a preliminary agreement that Soyuzkali will be headquartered in Switzerland, with Belaruskali and Uralkali each holding a 50% stake.
Gritskov was not available on further deals related to the deal.
In the meantime, a source close to the Russian team of negotiators told PRIME that the parties had agreed on the export price formula and the distribution of overseas sales between Belaruskali and Uralkali.
In turn, a source in Belarus’ government informed that Belarus’ government will continue negotiating arbitrary issues relating to Soyuzkali. In particular, Belarus is opposed to authorizing Soyuzkali to be a regulator in certain areas. For instance, Belarus is not happy that Russia’s Uralkali exports potash fertilizers through different channels and insists that fertilizers produced by Uralkali should be exported exclusively through the BPC and its successor Soyuzkali.
The source said the parties had not yet fully agreed on the export price formula and the distribution of overseas sales.
It was reported with reference to Belarus’ First Vice Premier Vladimir Semashko that Belaruskali and Uralkali were expected to reach a compromise on potash business practices by the Belarusian Potash Company.
In his words, Belarus and Russia have to agree on two key issues:
Semashko said that the sides were arguing about 0.5-1% in foreign sales of Belaruskali and Uralkali. He is convinced that it is necessary to preserve a single Belarusian-Russian company that will export potash fertilizers.
At the moment, Belaruskali exports 47.5% of all potash fertilizers produced, while the share of Uralkali is 52.5%. Belarus finds it unfair and insists that the share of Belarusklai should be 49.15%.
Semashko believes it was the right decision that Belarus and Russia should sell potash fertilizers on foreign markets via a single company.
Established in April 2005, Joint Stock Company “Belarusian Potash Company” (BPC) the sole exporter of potassium fertilizers produced by Belaruskali and Uralkali.
The BPC shareholding structure includes Belaruskali with 45%, Belarusian Railways (5%) and Russia’s Uralkali with 50%.
At the moment, BPC controls 42% of the world’s potash fertilizer market.