Trump says US is working on deal to purchase potash from Belarus

WASHINGTON/WINNIPEG, Sept 21 (Reuters) - President Donald Trump said on Monday that Washington is working on a deal to purchase potash from Belarus for less than what the US currently pays to Canada.

"The United States is working on a massive Deal with respect to the purchase of Potash from Belarus," Trump said in a post on Truth Social.

"The pricing would be for substantially less than we are currently paying to Canada, very good news for our Farmers and Ranchers."

The mineral helps improve a plant's disease resistance and crop quality and increases yields.

The announcement signals Trump's willingness to use alternative suppliers as leverage in his trade disputes with Canada, which supplies the vast majority of US potash imports. It could also mark a further thaw in Washington's relations with Belarus after the lifting of sanctions. 

Canada-U.S. Trade Minister Dominic LeBlanc and Saskatchewan-based Nutrien, the world's top potash producer, had no immediate comment. 

LUKASHENKO SEEKS FROZEN FUNDS 

Belarusian President Alexander Lukashenko, a close ally of Russia,  said on September 11 that his country resumed selling potash to the United States following the lifting of US sanctions. Lukashenko said he  wants Washington to return over $40 million that is "stuck" in the US banking system, however. 

Belarus and Russia are major potash producers, but sanctions and the closing of a key port on Lithuania's Baltic coast have made those supplies expensive to ship to the US through Russia's Arctic. The US is still receiving potash exports from Russia, but the overwhelming majority of supply comes from nearby Canada. 

ANALYSTS DOUBT PRICE IMPACT 

Fertilizer analyst Josh Linville of StoneX said he doubts Belarusian potash will play a major role in either supplies for US farmers or in lowering prices that they presently pay. 

"I'm afraid the impact would be limited. We have not struggled to find potash," he said. "We have more than enough to go around. It is phosphate and nitrogen that we need help with."  

Even if Lithuania opened its port of Klaipeda to Belarusian potash exports, the relatively low current value of potash makes it hard to justify exports through the Baltic and across the Atlantic Ocean, Linville said.

The Iran war has restricted nitrogen and phosphate fertilizer supplies, blocking most Gulf shipments of nitrogen fertilizer, natural gas and sulfur —  a key component in phosphate mining. 

(Reporting by Bhargav Acharya in Toronto and Daphne Psaledakis in Washington; Additional reporting by Ed White; Editing by Doina Chiacu and Matthew Lewis)