Brazil mulls new sugar quota for U.S. amid ethanol talks

Brazil is considering proposing an increase in its sugar export quota to the United States if Washington seeks improved terms for selling ethanol to the Brazilian market, according to Luis Rua, secretary of trade and international relations at the Agriculture Ministry. He stressed, however, that the idea remains hypothetical, as the U.S. has yet to signal what measures it might adopt in this trade relationship.

While steel and aluminum exports are central to ongoing talks, Mr. Rua said the U.S. has shown clear interest in expanding access to the Brazilian market for its corn-based ethanol. “If there’s any deeper negotiation around ethanol, we believe there must be some sort of compensation—sugar, for instance,” he told Valor.

From the Brazilian side, a key concern is protecting ethanol and sugar producers in the Northeast. If negotiations progress, Mr. Rua said Brazil could push for safeguards, such as import quotas or designated entry ports for foreign biofuel.

Still, he emphasized that no concrete plan has been outlined. “Any deal would need to involve a counterpart from the same sector, and for us, that’s sugar,” he said.

Mr. Rua did not disclose whether specific figures are being discussed. Brazil currently has an annual sugar export quota of 152,000 tonnes to the U.S., but he noted that actual exports reach around 750,000 tonnes. The surplus is taxed at nearly 80%. “Our quota only covers one-fifth of the U.S. market needs. If there’s a negotiation, it would naturally need to involve a trade-off within the same sector,” he said.

Check out below a history of Brazilian sugar exports to the United States starting from 2021. The data is from DataLiner:

Brazilian Sugar Exports to the United States | 2021 – 2025 | TEUs

Source: Datamar (Click here to request a demo)

Speaking in a Senate hearing this week, Agriculture Minister Carlos Fávaro also backed the idea of easing access for Brazilian sugar exports should the U.S. push for more room to sell its ethanol. “Since the Lula administration reinstated the 18% import tariff on ethanol, the U.S. has been protesting and demanding it be removed. But they don’t consider lifting their own sugar tariff, which reaches up to 90%,” Minister Fávaro said. “If they agree to eliminate the sugar tariff, we can eliminate the tariff on ethanol, beef, everything.”

Mr. Rua confirmed Valor’s earlier report that Brazil may also propose opening the U.S. market to Tahiti lime exports and expanding its beef quota. Talks on limes began 25 years ago, while the beef quota shared among ten countries currently stands at 65,000 tonnes and was exhausted within two weeks.

“Some countries aren’t using their share, so maybe Brazil could step in. We’re already exporting around 230,000 tonnes of beef to the U.S. It’s our second-largest market, and it’s a complementary product there—used in hamburgers and meatballs,” Mr. Rua said.

He added that there is no set timeline for concluding any agreements or entering formal negotiations with the U.S., which would require approval from higher levels of government. The Foreign Affairs Ministry and the Ministry of Development, Industry, Trade and Services are leading discussions on the matter.

Attention is focused on early April, when U.S. President Donald Trump is expected to announce “reciprocal tariffs” on trade partners. In Brazil’s case, ethanol is the main point of contention. The import tax on U.S. ethanol is currently 18%, while Brazilian ethanol faces a 2.5% tariff when entering the U.S. market.

Source: Valor International

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