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$50mn from overflight fees a year and the losses to Belavia will increase the total losses to approximately $100mn, according to expert estimates. All in all, aviation is worth 2-3% of GDP.
Following the initial actions European Commission President Ursula von den Leyen warned that more sanctions were on the way and the talk has turned to sanctioning Belarus’ potash exports. But it is not a done deal: Brussels said on May 26 it needs more “time to make the final decision.”
Foreign ministers gathering in the Portuguese capital on Thursday said they were looking at targeting sectors that play a central role in the Belarus economy, to inflict real punishment on President Alexander Lukashenko.
Luxembourg Foreign Minister Jean Asselborn said as cited by Reuters: "The keyword, I think, is potash. We know that Belarus produces very much potash, it is one of the biggest suppliers globally, and I think it would hurt Lukashenko very much if we managed something in this area."
The small republic is home to Belaruskali, the largest potash producer in the world that accounts for 15% of global supply.
Exports 2019
“Potash exports account for 20% of Belarus’ budget revenues, with oil exports accounting
Belaruskali exports all over the world, and accounts for 18.2% of global potash production, the third-biggest producer. The EU takes up 20% of its total production. Moreover, potash exports account for 20% of Belarus’ budget revenues, with oil exports accounting for another 30%. The Belarusian budget already went into deficit last year due ot the economic dislocation of country-wide protests and the deficit grew to a record 30% of GDP in the first quarter of this year, Tadeusz Giczan, the editor of Nexta, told bne IntelliNews. Cutting off exports of potash to the
prices, but the joint venture broke up in August 2013 after eight years.
Typically Lukashenko invited Uralkali CEO Vladislav Baumgertner to Minsk for talks with the Prime Minister on the deal the same month... and arrested him as he was on the way to the
airport to leave. Another major scandal emerged. As bne IntelliNews reported at the time, it took until February
the next year to get Baumgertner out of jail and the charges dropped.
China is one of the world's biggest consumers of potash and there is
a possibility of a grand deal between China, Russia and Belarus where the exports of potash are rejigged
so all the players maintain their current supplies and revenues, but following the incident in 2013 there is no love lost between the Russian and Belarusian potash producers.
“We’ll substitute Europe, which is growing mercilessly old, for rapidly growing Asia,” Lukashenko said on May 27, as cited by Bloomberg.
Uralkali tried to restart the joint venture in June 2016, but was rebuffed by the Belarusian side. A potential deal fell apart after Lukashenko insisted on dictating the terms of the co-operation.
In the meantime Russia’s major potash producers have been consolidating.
In December last year Russia’s two
for another 30%”
Its production is equivalent to that of Russia and Morocco’s output combined. Potash is the second most important export product (8.7% in 2019 of the total) after refined petroleum products (16.5%) and makes up 61% of the chemical and fertiliser exports by value.
The EU statistics agency said the bloc imported €1.2bn worth of chemicals, including potash, from Belarus last year, as well as more than €1bn worth of crude oil and related products
such as fuel and lubricants.
EU could be extremely painful for the already cash-strapped government.
If sanctions are imposed on Belarusian exports, VTB Capital (VTBC) said in a note that prices for the fertiliser would surge but the upswing would only be temporary.
Russia’s main potash producer Uralkali would happily step into the breach and supply EU farmers in its place. The two companies used to work together in a mini-cartel to boost
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