Tire Industries Seek to Lower Import Tax on Natural Rubber

In August, Brazil’s Foreign Trade Chamber (Camex) will decide whether to accept a request from the National Tire Industry Association (Anip), which represents tire manufacturers operating in Brazil, to reduce the import tax on natural rubber. Rubber producers and tappers warn that lowering this tax—which is reviewed every two years—could be “the final blow” to domestic production, which has been in crisis for years due to low prices.

Eduarda Ferreira Leite, technical advisor at the Brazilian Confederation of Agriculture and Livestock (CNA), which represents producers, explained that in 2023, the sector succeeded in raising the rate from 3.2% to 10.8% by including rubber in the Common External Tariff Exception List (Letec).

“Our original request was for a 22% rate to equalize production costs since there’s a major disparity between rubber prices from Asian countries, which do not meet the labor and environmental standards required in Brazil. The 10.8% rate wasn’t ideal, but it had a positive effect, improving the price curve and producers’ profit margins.”

According to the advisor, CNA is gathering technical arguments and seeking ministerial support to submit a request to Camex to maintain or even raise the current tax to combat what it calls “unfair competition” from Asian rubber, which now accounts for 88.5% of global production.

Antonio Carlos Gerin, a rubber producer in Minas Gerais and president of the Sectorial Chamber for the Natural Rubber Supply Chain at the Ministry of Agriculture and Livestock (Mapa), stated that the farm-gate price, which reached R$7.50 at the start of the harvest in October 2024, has already dropped to R$4.50—below the estimated production cost of R$7.00.

“Tire companies, which purchase 90% of rubber produced in the country, want to import cheaper raw material, showing a complete lack of sensitivity toward the worsening crisis of this crop in Brazil—one that is caused by the industry itself by setting prices below production cost.”

Fernando Guerra, executive director of the Brazilian Association of Natural Rubber Producers and Processors (Aprobor), said that Anip’s arguments “reflect total ignorance of the sector and are completely disconnected from reality.” As a result, the association, according to its president José Fernando Benesi, made it clear during the Sectorial Chamber meeting that it is working to keep the 10.8% rate in place.

On social media, Natalino de Freitas, president of the National Movement of Rubber Tappers and Producers (MNPS), warned that the profession of the rubber tapper—and their partner, the rural producer—is being threatened by Anip’s request.

“Our sector is at serious risk of extinction in the country. Producers have suffered a lot due to low rubber prices, which is a strategic product for Brazil and sustains many municipalities, especially in São Paulo. In my hometown, Palestina, for example, rubber is the third-largest economic product and employs many people,” said Freitas, who is calling on politicians to block Anip’s proposal.
In a statement, the association did not explain why it seeks to reduce the tax. Still, it claimed that importing rubber is necessary because domestic production is insufficient to meet the total demand of the tire industry in the country. However, it stated that it always prioritizes local sourcing.

Anip represents 11 manufacturers (Bridgestone, Continental, Dunlop, Goodyear, Maggion, Michelin, Pirelli, Prometeon, Rinaldi, Titan, and Tortuga), which operate 21 factories in 7 states across Brazil.

“The sector generates 32,000 direct jobs and more than 500,000 indirect jobs. The manufacturers also play a central role in the reverse logistics of scrap tires through Reciclanip, ensuring the industry’s environmental sustainability,” the statement concluded.

Last year, Brazil produced 270,163 tons of rubber, and the industry imported 150,435 tons—down from 162,800 tons in 2023 and 251,426 tons the year before, when the tax was lower. The industry also imports ready-made tires, totaling 673,256 tons last year, the highest in the last five years. The import tax on tires is 16%.

Between 1870 and 1920, Brazil was the world’s largest producer and exporter of rubber, which is native to the Amazon but had its seeds smuggled to Southeast Asian countries by the British—in what the industry considers one of the first global cases of biopiracy.

Today, the country produces about 2% of the global supply, and the area planted with rubber trees is shrinking in São Paulo as producers abandon plantations or cut down trees to grow sugarcane. São Paulo accounts for around 64% of national production and is home to 80% of the country’s latex processing plants.

Source: Globo Rural

Sharing is caring!