Potential Brazilian ethanol import tariff 'ridiculous': RFA

21.06.2017

A potential Brazilian ethanol import tariff would be "destructive and ridiculous," Bob Dinneen, president and CEO of the Renewable Fuel Association, said Tuesday at the Fuel Ethanol Workshop in Minneapolis.

Dinneen was giving the keynote speech at the conference when he highlighted that Brazil was the largest single importer of US ethanol so far in 2017 and that restricting availability of cheap ethanol into the Brazilian market was detrimental to the US and Brazil.

"Brazil is something of a wild card," Geoff Copper, senior vice president of the RFA, added when looking at what is going to happen for US exports to that market.

Sugar trade association UNICA as well as ethanol producers in the North-Northeast of Brazil are asking for an import tariff on the biofuel. However, Brazil's agricultural sector has opposed the tariff over concerns the US could apply retaliatory tariffs.

The US is net long ethanol and so is dependent on export markets to absorb the balance. But recent changes in the export landscape have shifted the key buyers of US ethanol.

China emerged as the third-largest buyer of US ethanol in 2016. But China in January applied a 30% import tariff to ethanol, effectively stopping US exports to that market.

"China is schizophrenic," Dinneen went on to say in reference to the Chinese trade policy around ethanol and its co-product, dried distillers grains, which were also slapped with a tariff.


platts

Readers choice: TOP-5 articles of the month by UkrAgroConsult