UPDATE 1-Brazil Increases Quota for Tariff-Free Ethanol Imports, but for Only One Year

Brazil, Business News/Analysis, Federal Agency, Feedstocks, Field/Orchard/Plantation Crops/Residues, Marketing/Markets and Sales, Opinions, Policy, White House

September 3, 2019

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by Luciano Costa and Jake Spring (Reuters) Brazil has renewed and increased the size of its tariff-free quota for ethanol imports, but the new allotment will last only one year instead of the two years allocated to the former quota that expired on Saturday, according to the country’s official gazette.

The Brazilian government will allow tariff-free ethanol imports up to a limit of 750 million liters (198 million gallons) per year, compared to the former quota of 600 million liters annually. Imports beyond the quota are subject to a 20% import tariff.

Raising the quota is seen mainly benefiting the United States, the world’s largest ethanol producer and essentially the lone exporter of the biofuel to Brazil.

Brazilian Foreign Minister Ernesto Araujo and President Jair Bolsonaro’s son Eduardo presented the plan for a new, enlarged quota to U.S. President Donald Trump on Friday during a visit to the White House, the Foreign Ministry said on Monday.

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Unica has said in the past that it would only agree to the renewal of the ethanol quota if Brazil would get an equivalent tariff-free quota for sugar.

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U.S. ethanol producers, who have been pressing for a total end to the tariffs, criticized the decision.

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“The token increase in the quota does nothing to provide relief to Brazilian consumers who face higher fuel prices because of Brazil’s discriminatory policy,” it said, noting that the United States does not tax Brazilian ethanol imports. READ MORE

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RENEWABLE FUELS ASSOCIATION CRITICAL OF SMALL BRAZILIAN ETHANOL QUOTA (Brownfield Ag News)

Brazil to Import More U.S. Ethanol Tariff-Free, But Not Much (Farm Journal’s Ag Pro)

Brazil increases TRQ for ethanol, but U.S. groups not satisfied (Fence Post)

Brazilian Government raises US ethanol quota to 750 million litres (Biofuels International)

Growth Energy, USGC, and RFA Comment on New Brazil Tariff Rate Quota (Growth Energy)

IOWA FARMER ‘DISAPPOINTED’ AT TRUMP’S BOAST OVER NEW ETHANOL TRADE DEAL WITH BRAZIL: ‘HE DOESN’T KNOW THE NUMBERS (Newsweek)

Latest U.S.-Brazil Ethanol Twist Is Setback for American Farmers (Bloomberg)

RFA, USGC and Growth Energy Comment on New Brazil Tariff Rate Quota (Renewable Fuels Association)

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