Chinese sovereign wealth fund CIC has become the second largest shareholder in Uralkali of Russia, the world’s largest -potash producer, in the latest shake-up to hit the industry.

CIC, which converted bond holdings into equity equivalent to a 12.5 per cent stake, will have one seat on the Uralkali board, giving the Chinese fund greater insight into the company’s negotiating and pricing policies. It also simplifies its ownership structure, paving the way for Russian oligarch Suleiman Kerimov, Uralkali’s largest shareholder, to leave completely – a key step towards resolving the company’s problems with neighbouring Belarus.

Uralkali, which produces about 20 per cent of the world’s potash – a key nutrient for agriculture – sent the market into a tailspin this summer when it quit an export cartel formed with Belaruskali. This caused a dramatic drop in global potash prices and upset relations between Russia and Belarus .