If BPC Stops Production for a Long Time, MOP Import Prices in China will Go Up

Belarus is one of main original countries of China’s MOP import, and BPC is an important potash producer in Belarus. Influenced by political instability in Belarus, BPC stopped production on August 17th. It would bring certain influence to China’s potash market. 
 
BPC is one of world’s biggest potash producers, with potash capacity of more 12 million MT. BPC’s potash output accounts for 18% of the global total and its exports take up 16% in the global total. According to data in 2019, the total exports of potash factories in Belarus reached 6.2 million MT, with the export value of 2.8 billion US dollars. China and India are the main buyers. In 2019, China’s MOP imports from the Belarus were 1.8737 million MT, taking up 20.65% in the total, only after the imports of 3.2565 million MT from Canada and 2.1763 million MT from Russia. China’s MOP imports from Belarus during January and July of 2020 reached 43.06 million MT, taking up 9.14%. 
 
As early as April this year, China signed potash contracts with BPC at the price of 220 US dollars/MT. During the period of production suspension this time, BPC said that it would try to fulfill all contracts signed, but there is uncertain when it resumes its production capacity. It was said that Sino-agri received the advice of shipping of 62% white potash from BPC on August 21st. It has no great and direct influence on the supply in China. But generally speaking, the suspension of production of BPC has pushed up the prices of global potash fertilizer. In the last two weeks, the prices of border-trade potash have increased by RMB 20-30/MT. BOABC’s analysts think, if BPC suspends the production for a long time, the demand gap of potash in China would be met by the suppliers from other countries. However, influenced by a tight supply on the international market, potash import prices must go up obviously.