Brazil delays enforcement of approved antidumping duties on imported milk powder

Brazil’s Foreign Trade Chamber, known as Camex, published a resolution on Monday (8) establishing definitive antidumping duties, for up to five years, on imports of bulk whole and skim milk powder from Argentina and Uruguay.

Immediate enforcement of the duties, however, was suspended pending a “public interest” review and an assessment of the potential inflationary impact of making foreign purchases more expensive. The government cited risks to supply and food security as part of the justification for delaying the measure. Domestic producers dispute that argument. Imports therefore remain exempt for now.

Gecex made the decision at a meeting held on May 28. The antidumping duties were approved but suspended at the request of the Ministry of Planning and Budget so the government could assess the measure’s potential effects on supply, industrial costs, food inflation and consumer chains.

The investigation into milk powder imports from Argentina and Uruguay recommended antidumping duties ranging from US$167.31 per tonne, or 4.4%, to US$4,183.17 per tonne, or 111.8%, for Argentine exporters. For Uruguayan exporters, the recommended duties range from US$378.27 per tonne, or 10%, to US$4,196.72 per tonne, or 109.2%.

The chart below shows the monthly volumes of powdered milk imported by Brazil in containers via seaborne trade, according to Datamar data:

Powdered Milk Imports | Jan 2023 – Apr 2026 | TEU

Source: DataLiner (click here to request a demo)

The highest tariffs apply to companies that did not answer the investigation questionnaires or present a defense. In all, 17 Argentine exporters took part in the process. For most of them, the antidumping duty was set at US$1,707.08 per tonne. Three companies were assigned lower rates: Mastellone Hermanos S.A., at US$167.31 per tonne; Gloria Argentina S.A., at US$663.75 per tonne; and Las 3 Niñas S.A., at US$903.50 per tonne.

Only three Uruguayan exporters responded to the process: Alimentos Fray Bentos S.A., with an antidumping duty of US$378.27 per tonne; Compañía Láctea Agropecuaria Lecheros de Young S.A., with US$850.07 per tonne; and Cooperativa Nacional de Productores de Leche, or Conaprole, with US$613.32 per tonne. For all other companies, the duty will be US$4,196.72 per tonne.

Enforcement suspended

Even though the investigation found dumping, the government decided to suspend the additional import charge while it assesses the possible effects of the measure on the domestic market, including the production chain, industry and consumers.

“Although the investigation identified evidence supporting the imposition of antidumping duties, the note highlights that Brazilian trade defense legislation allows, in exceptional circumstances and for public interest reasons, the suspension, adjustment or non-application of measures of this nature, especially when there may be significant repercussions for inflation, supply, consumers and production chains,” the technical note published Monday said.

The government’s economic assessment suggests that “the domestic milk and dairy market is going through a period of high inflationary sensitivity, marked by cost pressures, climate risks and the social importance of the product, especially for lower-income families and food security.”

The note also stressed that Argentina and Uruguay account for nearly all of Brazil’s milk powder imports and pointed to possible “significant impacts on domestic prices and supply” if the tariffs were applied immediately.

The preliminary findings suggest the “existence of exceptional circumstances related to potential inflationary impacts, supply risks and relevant effects on consumer chains and final consumers, justifying a precautionary assessment of whether immediate suspension of the measure is appropriate and timely.”

The document also cites the recent increase in consumer prices for UHT milk, in a context of rising costs, higher fuel and input prices, a relative reduction in supply and climate risks tied to the livestock cycle, as well as a high probability of adverse weather events in the coming months, such as El Niño.

In its arguments, the government said milk powder has “specific relevance” for consumption by lower-income families, especially in Brazil’s North and Northeast regions. The technical note added that, although bulk milk powder in packages of more than 800 grams was not the target of the investigation, the product is used as an industrial input in sectors such as dairy, bakery, chocolate, biscuits, ice cream and food preparations.

“Any increase in costs resulting from the immediate application of the duties could have indirect effects on consumer prices across several food segments,” the note said.

The resolution states that the Foreign Trade Secretariat, Secex, of the Ministry of Development, Industry, Trade and Services, MDIC, will be responsible for opening a public-interest review to analyze the impact of any application of the antidumping duties on economic agents in the production, distribution, sales and consumption chain linked to the domestic industry.

Industry disputes the decision

A technical note prepared by the Brazilian Confederation of Agriculture and Livestock, CNA, argues that antidumping duties on milk powder from Uruguay and Argentina would have no inflationary impact and defends the application of the tariffs.

CNA said the antidumping measure applies only to bulk industrial milk powder intended for industrial use. Retail milk powder in packages of up to 800 grams and UHT milk are outside the scope of the measure.

“The product consumed directly by families is not affected,” the organization argued.

CNA also said products that use milk powder as an input are mostly ultra-processed goods, such as chocolates, ice cream, filled biscuits and sweetened dairy drinks, which are not part of Brazil’s national basic food basket.

“The weight of these products in the IPCA inflation index is only 0.26%, and the imported share of apparent domestic consumption is approximately 6%, making the inflationary impact null or absolutely negligible,” CNA argued.

“The main basic food items remain outside the scope of the measure and are therefore not affected,” the organization concluded.

Source: Globo Rural

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