The board of state-owned Lithuanian Railways agreed on Monday to halt carrying potash produced by Belarus state-owned potash firm Belaruskali until it receives government authorization to continue, according to a statement from the rail operator.
Belaruskali, the world’s second-largest manufacturer of agricultural fertilizer, a major cash maker for Belarus, was sanctioned by the US in August, a year after a crackdown after a disputed presidential election in which President Alexander Lukashenko claimed victory.
The restriction on potash sales went into force on December 8 following a four-month transition period, although Belarusian potash has continued to be transported via Lithuania.
This caused a public outcry in Lithuania, a U.S. ally and one of Europe’s most vocal critics of human rights abuses in Belarus.
Earlier this month, Lithuania terminated the transport agreement between its railway company and Belaruskali, saying it went against national security. The agreement will end on Feb.1.
But six companies from Belarus and Lithuania, including potash trading companies, have asked the railway to continue to transport the potash after the Belaruskali agreement ends on Tuesday, the railway company said.
Their requests were referred to the government, which will decide if these contracts go against national security.
“This policy was agreed by the shareholder (the government) and approved by the board”, said the state-owned rail company.
Landlocked Belarus uses Lithuania’s Klaipeda port to export potash to customers which include India, China and Brazil.
Russia, which remains Belarus’ ally, does not have enough spare port capacity to handle Belaruskali’s 12.5 million tonnes a year.
Potash is used as a fertilizer many crops including soybeans, rice, corn, fruits, vegetables, palm oil and wheat, and its prices are set for an extended rally after the U.S. sanctions.
Lukashenko earlier on Monday ordered his government to respond “within days” if Lithuania blocks Belarus cargos from reaching its port.
“We are ready for negotiations, but if they continue to smother us, we will put our plan into motion”, Lukashenko said in a video on published on his Telegram channel. He did not detail the plan.
Lithuanian Prime Minister Ingrida Simonyte came under pressure to resign after Lithuania’s potash transports continued beyond Dec. 8, when the U.S. sanctions came into full effect, but she announced she would stay in her post.
The head of the railways agreed to step down in December to “de-escalate” the public outcry.
Norwegian fertiliser maker Yara, which buys 10-15% of Belaruskali produce, said this month it will wind down purchases of potash from Belarus by April 1 as international sanctions made it impossible to continue the trade.