“We are negotiating ethanol imports from the United States,” says Ag Ministry top official

Brazil expects to close the year with around 300 new markets unlocked for its agricultural products. This new target comes after the country set a record by opening 200 markets in 60 destinations within 20 months of the current administration, with five more announcements recently made.

“We have exceeded all expectations, and we know we can achieve even more in these last three months, with Brazil regaining its global prominence,” said Deputy Minister and Secretary for Trade and International Relations at the Ministry of Agriculture, Roberto Perosa, in an interview with Broadcast Agro.

Currently, approximately 2,000 processes are underway for new export opportunities or market expansion for agricultural products. Among the negotiations, Brazil seeks access to the Japanese and South Korean markets for Brazilian meat and expanded access to the U.S. market for sugar and beef.

China is Brazil’s main destination for agribusiness exports, accounting for one-third of the country’s shipments. Over 18 items are under negotiation.

Here are a few selected questions from Mr. Perosa’s interview:

Is the U.S. willing to expand its market for Brazilian products, considering your recent visit?

We already have a great trade relationship with the United States. Both countries are major agricultural producers. On top of that, we understand the challenges producers face and know which commercial opportunities exist. There are many topics under bilateral discussion. We are negotiating the importation of ethanol from the U.S., the expansion of Brazil’s beef quota (currently 65,000 tonnes per year) and sugar quota (annual volumes), and the opening of the U.S. market to Brazilian fruits like Tahiti lime. We aim to achieve market balance for both the U.S. and Brazil without harming the producers.

The U.S. has long sought a reduction in Brazil’s import tariff on American ethanol, currently at 18%, a request that displeases the domestic sugar-energy sector. Is this being discussed?

We are evaluating allowing wider access to American ethanol in Brazil. We must consider all aspects of this because of its significant impact on domestic production. Thus, we need to analyze the implications and engage in comprehensive negotiations, balancing both U.S. and Brazilian interests to reach an equitable decision. We are major sugarcane ethanol producers, while the U.S. leads in corn ethanol. Currently, we do not have full access to the U.S. sugar market. We need that access to consider a similar provision for American ethanol. It is about reciprocity between markets. If we can work out larger quotas for both, it would likely be acceptable to producers in a commercial deal.

The chart below reveals the top most imported products shipped from the United States to Brazil in containers between January and August 2024. The information comes from DataLiner, a Datamar-fed intelligence service.

Top Imports from US | Jan 2024 – Aug 2024 | TEUs

Source: DataLiner (click here to request a demo)

Does ethanol negotiation include the possibility of the U.S. adopting a mandatory ethanol blend in gasoline, like in Brazil?

In addition to promoting a global biofuels alliance, we are pushing for the U.S. to adopt a mandatory ethanol increment in the liquid fuel mix, which is currently not required. If the U.S. were to mandate a 15% blend, for example, compared to Brazil’s current 27.5%, which may reach 35%, it would significantly boost ethanol consumption. All options are being considered. No final decision has been made, and negotiations are ongoing.

Brazil achieved a record of 200 new markets unlocked for agricultural products over 20 months of the current administration. How does this market expansion fit into the country’s export strategy?

President Lula gave us a clear directive to resume constructive international dialogue, which leads to the resumption of strong commercial relations. In 2023, we broke the record with 78 new markets. This year, we have already reached 127, with 205 markets opened since the beginning of the current administration. There is great potential to increase this number by the year’s end and continue this trend in the coming years. Some agricultural sectors face internal challenges. As a government, we seek new market opportunities, ensuring global food security while generating foreign exchange and income.

President Lula stated in July that he expected 200 markets to be opened by the end of this year. With the goal reached three months ahead of schedule, what is the new target for the remainder of 2024?

Market openings depend on negotiations and acceptance from other parties, but given the extraordinary progress made, I believe we should continue to break all foreseen records for Brazilian agribusiness until the end of the year. We are confident that we can make significant strides in these last three months and potentially reach 300 market openings.

Minister Carlos Fávaro has indicated potential new market openings for Brazilian agribusiness resulting from the G20 leaders’ meeting in Brazil in November. Which markets is the Ministry currently prioritizing?

Brazil’s renewed leadership, with the G20 presidency this year and hosting the BRICS and COP30 summits next year, creates opportunities for direct contact with world leaders here in our country. Consequently, bilateral negotiations advance significantly as ministers from other countries visit Brazil with requests and approval for potential agreements. This also contributes to an increasing number of market openings. In November, Chinese President Xi Jinping will visit Brazil. We are negotiating with China to open markets for products like fresh grapes, sesame, sorghum, and DDGs (distiller’s dried grains, a corn ethanol byproduct), in addition to beef, pork, and poultry byproducts. These items represent new opportunities for Brazilian agribusiness.

You recently met with Zhao Zenglian, Deputy Minister of China’s General Administration of Customs (GACC). What stage are the technical discussions regarding new products and the review of meat export protocols at?

We have 18 items under negotiation with China, some in the final stage, others in intermediate phases, and some just entered talks. We are also working on issues such as revising animal protein export protocols and recognizing Brazil’s foot-and-mouth disease status. We agreed with the GACC minister to make an additional effort to deliver more results during the November bilateral meeting between President Lula and President Xi to strengthen relations between the two countries. Major announcements are expected during the G20 summit in November.

There were expectations of opening the South Korean and Japanese markets to Brazilian beef this year, a goal long pursued by the domestic industry. How are these negotiations progressing? Is that expectation still in place?

Precision is always required when conducting bilateral negotiations. We recently visited South Korea, and I plan to return to Japan later this year. Negotiations with Japan are well advanced. South Korea’s market opening (for beef and pork) still requires some technical arrangements. However, we are confident that Brazil will succeed in opening the beef market to four major countries during our term: Japan, South Korea, Vietnam, and Turkey. Currently, the negotiations closest to conclusion are with Japan, South Korea, and Turkey, for which only a minor technical issue remains to be addressed.

Source: Revista RPA News

Click here to read the original interview in Portuguese: https://revistarpanews.com.br/estamos-negociando-a-importacao-do-etanol-dos-estados-unidos-diz-roberto-perosa/

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