Brazil sees easing of honey export crisis, but producers fear collapse without U.S. market

The federal government is expected to soon announce support measures for sectors and companies affected by the United States’ 50% tariff hike. Despite criticism from some industry leaders over the “delay” in drafting a contingency plan, government sources believe the crisis is beginning to stabilize due to solutions adopted in recent weeks by both Brazilian and American businesses.

Two cases were cited by officials involved in shaping the measures. One is honey. According to information provided to the government, business deals have resumed, and U.S. importers have agreed to cover the tariff costs in order to honor existing contracts. Ministries were also informed that Brazilian producers have found alternative markets for grapes that are no longer being shipped to the U.S.

“What was expected to become a crisis no longer is,” said a government source. The technical team is now focused on products like fish, mangoes, and nuts, which could be included in government procurement programs or credit assistance initiatives. “With honey and grapes resolved, that’s two fewer problems. We still hope that coffee will be exempted from the tariff,” the source added.

Renato Azevedo, president of the Brazilian Association of Honey Exporters (ABEMEL), stated that contracts have not been canceled, but rather all are being renegotiated in terms of price and shipping dates. In an effort to retain customers and keep trade flowing while awaiting a more stable environment, exporters are offering U.S. importers discounts of up to 30%.

The concern, however, is that this could financially ruin many producers. On the other hand, without the discount, Brazilian honey could become prohibitively expensive for American consumers, which would hurt future demand.

“In general, the idea is to keep exports moving, but the 30% discount will hit the business hard. Many producers could go under with that kind of margin loss. Applying it could render our beekeeping industry unviable,” Azevedo warned.

“Even before Trump’s tariff, Brazilian honey was already priced about 30% higher than Argentine honey, for example. That’s because Brazilian honey is organic. Now, the concern is that with the new tariff, the price difference could nearly double, and importers fear this will severely impact demand for our product,” Azevedo explained.

Some shipments were moved up, he said, to ensure the products reached the U.S. before the tariff took effect. Still, the situation remains unclear even for U.S. importers, who are pushing prices down and delaying new container orders.

“For now, they’re already negotiating prices, as there’s no way to absorb the full tariff cost on their end,” he said. A price renegotiation is underway to “split the bill,” Azevedo explained. Brazilian producers are covering part of the cost through discounts, while American importers cover the rest via the tariff.

The problem, according to Azevedo, is that importers want to cover “very little” of the cost. “We’re working with a discount of around 30%, which would result in a very low cost for them—about 5%,” he explained. “If the product is priced at 10, the 50% tariff pushes that to 15. With a 30% discount, the base cost drops to 7, and a 50% tariff adds 3.5, totaling 10.5,” he detailed.

The sector is still awaiting the government’s support package. Honey is already included in the government procurement program, for example, but Azevedo said the initiative is limited in scale and applies to very small volumes.

Source: Globo Rural

Sharing is caring!