Brazil will increase ethanol import quota

Brazil will raise its duty-free quota for ethanol imports to 750m liters (198m gallons) a year following a meeting between Chancellor Ernesto Araújo and US President Donald Trump.

The previous free quota was 600m liters and expired over the weekend. Imports beyond the quota are subject to an import duty of 20%. The quota increase mainly benefits the United States, the world’s largest ethanol producer, which provided 93% of Brazilian imports in the first seven months of 2019.

The change would result in a reduction of R$270m (US$65.54m) in tariff collection, the newspaper Valor Econômico reported on Saturday (08/31).

Brazil’s Foreign Minister Ernesto Araújo and President Jair Bolsonaro’s son Eduardo Bolsonaro met Trump at the White House on Friday, later telling reporters that the conversation covered issues from trade to the fires in the Amazon rainforest, although there was nothing to immediately announce.

Brazil’s sugar industry group Unica praised the decision as a step toward opening the market and eventually opening the United States to more Brazilian sugar.

“It was important for Brazil to make a gesture in favor of trade liberalization with the US, because at home we are seeing a broad free trade agreement,” Unica said in a statement.

Source: Reuters

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