Government supports Brazilian sugarcane producers' plea for 20% ethanol import tariff: Sindacucar

28.04.2017

Northeast Brazil sugarcane producers have gained the support of the country's Ministry of Foreign Affairs concerning the return of a 20% ethanol imports tariff, industry association Sindacucar Pernambuco said Wednesday.

In a meeting in Brasilia with Carlos Marcio Cozendey, the ambassador and undersecretary of economic and financial affairs of the Ministry of Foreign Affairs, ethanol producers from the Northeast and parliamentarians left satisfied they had gained the ministry's support, Sindacucar said.

Having gained the government's support, Sindacucar said the Ministry of Agriculture will send a technical note on the subject to the Foreign Trade Chamber (Camex) in May.

"We are in this struggle that is fundamental to maintain the national production and the generation of employment and income, especially in our region," the president of Sindacucar Pernambuco, Renato Cunha, said.

Cunha, along with producers in the Northeast and some lawmakers, has been pressing for the tariff.

"It does not make sense that things continue as they are, considering that those who [have opposed the tariff] are those who encourage imports of low-quality ethanol," Cunha said.

Cunha also said import figures for the quarter point to higher imports than the market needs.

"In the first quarter of 2017, more than 800 million liters were imported by distributors and traders and more than 70% of the volume was discharged in the Northeast" and in the middle of the region, which prevents the ethanol producer from selling its product, he said.

The import tax was suspended in October 2011 because Brazil was undergoing an ethanol shortage due to crop problems.

Brazilian imports of ethanol in 2016 totaled 834.6 million liters, a 63% year-on-year rise. Roughly 90% of the imports entered the country through North-Northeast ports.

Estimates from Kingsman, the agricultural unit of S&P Global Platts, show that in 2017 imports from the US alone could make up 25% of the ethanol consumed in the NNE region, up from 15% in 2016.

Brazilian ethanol imports in March totaled a record 291 million liters, up 13% month on month and more than three times the 81 million liters imported in the same period a year ago, Secretariat of Foreign Trade data showed Friday.

Of this total, 72% entered the country through Northeast ports, or 209 million liters. The balance, 82.5 million liters, entered through ports in the key Center-South region, up 8% month on month and the highest monthly volume since February 2012.

The country's January-March imports totaled 721 million liters, compared with 143 million liters a year earlier. In the last five months, Brazil imported 1 billion liters of ethanol, a record for the period.


platts

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