Fertiliser-maker Yara to stop buying potash from Belarus due to sanctions

  • Belarus is subject to Western sanctions
  • Yara buys 10-15% of Belarus' potash output
  • Potash is a major source of income for Belarus
  • Banks and logistics providers halting services

OSLO, Jan 10 (Reuters) - Norwegian fertiliser maker Yara (YAR.OL) said on Monday it will wind down purchases of potash from Belarus by April 1 as international sanctions made it impossible to continue the trade.

Yara estimates that it buys 10-15% of the annual output of state-owned Belaruskali, one of the world's largest producers of potassium salt, or potash, the crop nutrient that is a major foreign currency earner for Belarus.

The company said its purchase of potash from Belarus had been in full compliance with the sanctions but would still have to come to a halt.

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"Other parts of the supply chain are withdrawing essential services required to enable potash exports from Belarus, as a result of which Yara has initiated a wind-down in sourcing activities," the company said in a statement.

This included logistical and financial services companies, even where such services could be lawfully provided, a Yara spokesperson added.

"It is these practical challenges stemming from the sanctions, that have required us to evaluate alternative sources of supply," the spokesperson said.

Western powers accuse Belarus' President Alexander Lukashenko of rigging a 2020 presidential election and have piled sanctions on his regime, including restrictions on potash exports. read more

Exiled opposition leader Sviatlana Tsikhanouskaya has repeatedly called on Yara to suspend its activity in Belarus, and the company said in August it would consider the request.

Yara sources potash from nine suppliers globally, according to a company sustainability report filed last year.

"As part of our risk management work we continue to map alternative supply options to be able to respond to supply chain disruptions," the company spokesperson said.

Beleruskali was Yara's single biggest potash supplier, the spokesperson added.

Yara buys its potash from Belarus Potash Company (BPC), Belaruskali's sales arm. The Norwegian firm said it will seek to continue an industrial safety programme launched last year in cooperation with trade union representatives.

BPC did not immediately reply to a Reuters request for comment.

Global potash prices are set to rally after the United States imposed sanctions on BPC, piling more pressure on farmers and consumers already facing rocketing costs and a global economy navigating rising food inflation, analysts and industry sources told Reuters in December. read more

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Reporting by Terje Solsvik and Victoria Klesty in Oslo, additional reporting by Polina Devitt in Moscow; editing by Jason Neely, Robert Birsel and David Evans

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