2022 November 15
Unable to export its cargo via the ports of the Baltic states, Belarus has redirected its cargo flows to the ports of Russia. According to information obtained by IAA PortNews, oil products flow via Great Port of Saint-Petersburg while fertilizers are distributed among ports in various sea basins, as expected. Such a logistics reduces the competitiveness of Belarus’ exports.
Belarus continues redirecting its export cargo to the ports of Russia as it cannot use previous chains involving cargo handling at the ports of the Baltic states. The country’s key export cargo is oil products (some 10 million tonnes in 2022-2023) and potash fertilizers (about 11 million tonnes per year). Besides, Belarus is interested in handling wheeled vehicles, sawn timber, paper, and various chemical cargoes.
According to information obtained by IAA PortNews, Belarus’ oil products continue flowing via Great Port of Saint-Petersburg and the port of Ust-Luga under an agreement singed by the Governments in the end of the previous year. Previously, oil products produced in Belarus were exported via Estonia but a ban on handling of Belarussian oil products was introduced in the country in February 2022.
The situation with the transit of potash fertilizers is much more difficult. Russia is short of dedicated facilities (according to IAA PortNews’ estimates, annual shortage reached 8 million tonnes in 2021) while the designing of a terminal from scratch and its construction will take years. Therefore, we used to assume that Belarus’ fertilizers would be probably distributed in relatively small batches among various Russian ports and that is actually being practiced today.
As far as IAA PortNews knows, Belarus’ fertilizers are handled in big bags at MSCC Bronka (Multipurpose Sea Cargo Complex Bronka) near Saint-Petersburg. Initially, the terminal was mainly focused on containers. When visiting Saint-Petersburg in June 2022, Belarus President Aleksandr Lukashenko said that a port for handling cargo from Belarus would be built in the area of Bronka-Lomonosov.
“We have already started handling mineral fertilizers. I think, the busiest port will appear there (in Bronka — Ed.). Perhaps, that will not suffice us. However, we agreed to see if it would need an expansion,” Aleksandr Lukashenko said in summer.
So far, there is no data on the amount of Belarus’ fertilizers handled in big bags in Bronka, neither is information about a real beginning of works on construction of a terminal for Belorussian products.
Apart from the Baltic region, the plans on construction of a terminal are aimed at the western shore of the Kola Bay in the Murmansk Region. The new terminal is to hae a capacity of 5-7 million tonnes per year. An agreement between Belarus and the Murmansk Region was signed in September 2022.
“That issue was brought up a year ago following the first statements on possible restriction of cargo handling in Baltic ports. Together with our colleagues we started discussing the capabilities of our city and made our final decision having thoroughly considered a number of alternatives. That is also a political decision of Belarus. Our task is to proceed to its implementation promptly,” said Murmansk Region Governor Andrei Chibis.
The southern route is also to be used for Belorussian cargoes. The Republic of Belarus has announced its plans to transport up to 850 thousand tonnes of cargo via the Astrakhan Region by 2024.
“The cooperation results is represented by concrete figures of cargo turnover and shipment of Belorussian cargo. Over the four months, we have raised from zero to 90 thousand tonnes and we are going to build up the volumes of cargo handling first to 650 thousand tonnes and then to 850 thousand tonnes in 2024,” Roman Golovchenko, Prime Minister of the Republic of Belarus, said at the meeting with Igor Babushkin, Governor of the Astrakhan Region.
According to Igor Babushkin, the key focus of the cooperation is on interaction in the transport and logistics segments. He reminded about the long-term contracts under which the North-South international transport corridor (ITC) is being used for transportation of cargo (sawn timber, paper, Belaz units, chemicals and fertilizers) from Belarus to Iran, Iraq and the UAE.
As of today, about 35-40 thousand tonnes of Belarussian cargoes is handled in the port of Astrakhan every month with the total amount to exceed 200 thousand tonnes by the end of 2022.
The Far East basin of Russia is also in the focus of Belarus’ logistics. Far East ports ensure a direct entry to the markets of the Asia-Pacific Region.
However, cargo ‘scattering’ among different Russian ports has its disadvantages. First of all, handling of fertilizers in big bags is costly and it cannot fully replace a dedicated dry bulk terminal.
Secondly, the logistics involving Murmansk looks, mildly speaking, bleak as compared with the Baltic states’ logistics: cargo should be first delivered to Murmansk by railway the capacity of which is limited while the transport leg is long. The n cargo is to be transported round the North Europe across the northern seas.
Thirdly, North-South transport corridor is not perfect either. Both port infrastructure and the capacity of Iranian railways is limited.
Finally, the Far East route features an acute shortage of the Eastern Polygon’s railway capacity.
Nevertheless, all those drawbacks are so far offset by high prices for chemical fertilizers worldwide. As of today, their price index if almost three times as high as that registered in the beginning of 2021. If the prices return to the level of 2020 in the future, Belarus can have its dedicated terminals in Russia completed by that time while Russia can debottleneck its railways. Anyway, logistic routes via the Baltic states would be economically more viable.