hollywoodtone.blogspot.com Russian Belarus potash cartel may resume after breakup
hollywoodtone.blogspot.com Russian Belarus potash cartel may resume after breakup
Moscow - The new owners of the large Russian potash producer Uralkali are poised to resume cooperation as a cartel again with its former partner Belaruskali in Belarus. The cartel before its breakup controlled about 40 per cent of global potash exports.
The Russian ambassador to Belarus, Alexander Surikov said on Friday (Dec. 27):
"After the change of owners - shareholders were replaced by Uralchem [the world's second largest ammonium nitrate producer] and interests of Prokhorov [Russian tycoon-turned-politician] - Uralkali is ready to restore cooperation with Belaruskali"He blamed the original breakup partly on the Russian side whom he said "acted thoughtlessly and did not calculate all the consequences" but added that "both sides were to blame". He also said that the joint marketing system should be restored as it would be advantageous for both sides. Uralkali withdrew from the cartel in late July complaining that its Belarus partner had been delivering potash outside the agreement. The withdrawal caused the price of potash to plunge and precipitated disagreements between Russia and Belarus. The CEO of Uralkali Vladislav Baumgertner was arrested at the end of August, accused of abuse of power, and imprisoned in Minsk but later was sent back to Russia:
Belarus has extradited Uralkali CEO Vladislav Baumgertner to Moscow after being held hostage in Minsk in the so-called "potash war". This could mean the re-birth of the cartel controlling 40 percent of the $20 billion world fertilizer market.Earlier refusal to send Baumgertner back to Russia had prompted Russia to impose bans on pork and milk products from Belarus. Another Russian tycoon involved in the events that drew Belarus' ire was Suleiman Kerimov who has now sold his 21.75 per cent share in Uralkali. Kerimov has lost a few billion since the depression. He may be happy to sell:
Before the 2008 crisis hit, Kerimov’s fortune was estimated by Forbes at $17.5 billion, and by 2009 it had nearly vanished to $3.1 billion. The financial crisis nudged Kerimov to sell assets in Gazprom, Sberbank, and a real-estate project in Moscow, and to buy stakes in Morgan Stanley, Goldman Sachs, Deutsche Bank, Credit Suisse, and other western investments.Kerimov's stake was bought by another Russian billionaire Mikhail Prokorov's investment arm ONEXIM. The stake is valued at $4.35 billion. Dmitry Razumov, CEO of ONEXIM said:
"We are certain that the potash industry has strong fundamentals and that Uralkali, as the world's leading producer and the key player in the industry, has considerable potential for growth in value"The breakup of the cartel weakened potash prices on an already depressed market. If the cartel does resume it may help boost prices again. Canada's three main producers have their own cartel, Canpotex. The group recently signed a deal with the Indian government to supply about 1.1 million tons of potash.
hollywoodtone.blogspot.com Russian Belarus potash cartel may resume after breakup