Jason Barton

Professional Information and Energy News

Brazil Keeps Import Tariff on Ethanol at Least Until July

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There has been some talk that poor sugarcane harvests amidst increasing demand for ethanol in Brazil would cause the country to lower its tariffs on imported ethanol, allowing the U.S. to export corn ethanol. This is quite an ironic twist since the U.S. is the leading importer of Brazilian ethanol, which is much more efficient in terms of energy ratio and land use. Almost all of the talk on international trade in biofuels, and there has been much talk, has been about trade going the other direction.

It looks like it will continue in that direction for the time being, but it will definitely be interesting to watch how this develops in the coming months.

Brazzil Mag

Trying to understand Brazil since 1989

Friday, 12 February 2010 20:48

As announced by the Brazilian minister of Agriculture, Reinhold Stephanes, the reduction of the import tariff on ethanol has been postponed until July. Upon leaving the meeting of the Foreign Trade Board (Camex), he informed that the tariff reduction has been removed from the guidelines and will only be discussed again in five months.

According to the minister, the beginning of the sugarcane crop, in March, would render an eventual reduction of the import tax ineffective. “If we were to eliminate the tariff now, nothing would change with regard to fuel prices, because the sugarcane crop is going to start and prices would drop anyway.”

[…]

Presently, ethanol pays a 20% import tariff in order to enter Brazil. According to Stephanes, the tariff’s elimination, which should occur in the second half, will have diplomatic objectives.

“We are going to scrap the tax in order to pressure the United States into not taxing our ethanol on their market,” said the minister.

Read the entire article here.