Brazil Slaps US with Ethanol Quota, 20 Percent Tariff
by Jim Lane (Biofuels Digest) In Brazil, the Brazilian Chamber of Foreign Trade has approved a recommendation to impose a 20 percent tariff on U.S. ethanol imports after a 600 million liter tariff rate quota, according to postings from the Brazilian Minister of Agriculture, Livestock and Supply Blairo Maggi.
Local media are reporting this TRQ would be in place for the following two years, stymying access to a large and growing market for U.S. ethanol exports.
The move comes despite a pessimistic report from Australian analysts Green Pool on prospects for increased Brazilian ethanol production. Green Pool wrote that global sugar prices must fall much further from where they are now to have any sort of real impact on Brazilian mills to make them shift towards more ethanol production. Current sugar prices are around 13.41 cents per pound, below Sucden Financial’s estimate of the 14 cent ethanol parity line, but Green Pool still raised its estimate of Brazilian sugar production during 2017/18 by another 900,000 metric tons to 36.4 million tons.
We reported last month that the country’s foreign trade chamber has delayed yet again the decision whether to rescind the waiver on import taxes lobbed against ethanol, this time for 30 days. The chamber’s representatives from eight ministries may decide on an potential 500,000 metric ton annual import quota with out of quota imports fetching 20% duty instead of reverting to import duties on their own because they could not come to a decision. The Brazilian ethanol industry is seeking a 17% duty to stem the huge increase in imports seen this year.
Brazil Tweets Tariff Decision (Energy.AgWired.com)
Brazil Slaps Tariff on US Ethanol: US Ethanol Industry Considers Response to Tariff (DTN The Progressive Farmer)
New Tariff Unfairly Inhibits U.S. Ethanol Ability To Compete In Brazil (U.S. Grains Council)
Grassley, Senators to Lighthizer: Engage Brazil on Unfair Ethanol Tariff (Office of Senator Chuck Grassley (R-IA)