Brazil’s Ministry of Agriculture prorates new sugar export quotas to the US

Two weeks after the US government confirmed a new increase in the sugar export quotas from Brazil to the North American market under special tax conditions, the Ministry of Agriculture (Mapa) prorated the volume to be shipped until September 30 of this year among 37 mills across states in the North and Northeast.

Published in Brazil’s Federal Gazette on August 15, Ordinance No. 472 sets out the quotas allocated to each production unit. The 37 chosen mills were selected based on the results of the previous harvest. Precisely 15 are located in Alagoas and 11 in Pernambuco. The others are in Paraíba (2); Rio Grande do Norte (2); Sergipe (2) and in the states of Amazonas; Bahia; Maranhao; Pará and Piauí (one establishment in each).

The producers benefiting from the measure are all from the North and Northeast regions because of a 1996 law, Law No. 9,362, which establishes that to stimulate regional development, the export of products derived from sugarcane to preferential markets, such as the United States, must be prorated among the two regions, “in view of their economic stage.”

This is the second time Brazil’s Ministry of Agriculture has assigned an extra volume of sugar to be exported to the US this year. In May, the US showed interest in acquiring 35,160 tonnes with preferential treatment, in addition to the approximately 144,410 tonnes approved in 2021. The US government increased the initial priority allotment by 14 43 thousand tonnes at the end of July.

“This is rather frequent. Typically, some of the [producing] nations who get quotas [from the US government] cannot meet them. Or [US authorities] realize they require a bit more supply. So we [Brazil] are always consulted if we can meet [the demand],” explained Cid Caldas, the general coordinator of Cane and Sugar at Mapa, emphasizing that by combining the primary and additional quotas, national mills will be able to export just over 195 thousand tonnes of sugar to the United States under particular conditions.

“We’ve been trying to raise the [primary] quota, demonstrating that there are countries with quotas that have no production,” Caldas added, noting that the Brazilian government suggested zeroing the rate of imports charged for North American ethanol in 2020 if the US granted the same treatment to Brazilian sugar.

“Since sugarcane and ethanol production are closely associated in Brazil, once the US government is sending us ethanol, it should also open up its sugar market further,” said Caldas.

See below the track record of Brazilian exports of sugar (HS 1701) from January 2021 to June 2022. The data was collected via DataLiner.

Sugar (HS 1701) exports to the US | Jan 2021 – Jun 2022 | WTMT

Source: DataLiner (click here to request a demo)

Almost two years ago, the Brazilian government stated that national producers would be allowed to export an additional 80,000 tonnes of sugar that year due to agreements between Brazil and the United States. The rise in the first quota happened less than two weeks after the Brazilian government upped the cap on US ethanol imports.

Source: Agência Brasil

To read the full original article, please go to: https://agenciabrasil.ebc.com.br/economia/noticia/2022-08/ministerio-rateia-nova-cota-para-venda-de-acucar-aos-eua

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