The Vice-President of Fertilizer at St. Louis, Missouri-based StoneX says U.S. President Donald Trump's plan to buy potash from Belarus is not as simple as it sounds.
Josh Linville says logistics is the biggest challenge Belarus faces in exporting potash.
Lithuania has closed checkpoints on multiple occasions over the last three years due to security, airspace, and smuggling violations at the border.
"And when you start to look at their options, well, Latvia and Poland are both bordering them and are both NATO members. Ukraine certainly isn't going to help them anytime soon. That leaves Russia, and that's a little bit of a struggle," said Linville.
"So Belarusian potash exports, while they have existed, they have struggled. They are higher cost, they are slower to come, and so at this point, it's not something we see making a massive impact on the market unless his announcement has something to do with Lithuania agreeing to open those borders once again."
He says Belarusian potash would have to be very cheap to compete with Canadian potash, taking into consideration the cost to transport it from point A to point B.
"One of the biggest rates that we watch on a pretty consistent basis is the Arab Gulf coming to the NOLA market, New Orleans, Louisiana. That used to be $30, $35. I think this last week it was $110, $115, so rates are triple out there. So just moving it from point A to point B is massively expensive."
Linville doesn't believe the Saskatchewan potash industry, which produces approximately 87 per cent of U.S. imports according to the provincial government, has anything to worry about.
"Unless this announcement has something to do with Lithuania reopening their borders, I would say for the most part, no," said Linville, noting potash "is the one product we don't really need help with."
"Potash has been extremely steady since coming off of their highs set back in early 21, early 2022. So, yeah, I don't think it's anything that needs to be a major concern. It's certainly attention-getting. It's a headline grabber. But we're not seeing anything in the way of a fundamental difference out there."
He believes Trump is likely trying to make himself more popular among farmers.
"It's certainly getting talked about, right? It's been a popular topic today, and obviously this is something that can be twofold from his point of view, right? Number one, the American farmer sitting there saying, 'Oh, they're still fighting for us. They're trying to get lower prices. They're trying to get more supplies. That's something I want to vote for here at midterms.' And number two, it can be used as a mechanism against Canada as far as this trade conversation that keeps going back and forth, because we know both sides of the border have talked about potash, the importance of that potash flow from both sides.
"So in doing this, he could also be sitting there saying, listen, we can open up some other supply routes and not be as dependent on you guys. I think it's a little hollow. I don't think it can ring quite true, as some might hope, but it can be a tool."
