Unica advocates tariff-free sugar exports to the US

The new head of Brazil’s powerful sugarcane industry group, Unica, told Reuters that Brazil should seek a tariff-free sugar quota agreement with the United States, similar to the duty-free ethanol quota Brazil offers the U.S.

Brazilian President, Jair Bolsonaro, is set to have a meeting with US President Donald Trump next week to discuss bilateral trade, among other issues. Unica believes if Brazil’s sugar export proposal is not accepted, Brazil should impose duties of at least 20% on all ethanol imports. At the moment, the U.S. benefits from a 600m liter ethanol quota per year, with a maximum quota of 150m liters per quarter. In addition, the US only charges Brazil 2.5% on ethanol imports.

Unica believes similar trade conditions should be applied for sugar. The head of Unica, Evandro Gussi said, “Our current, tax-free ethanol quota is six times larger than our tax-free quota to sell sugar to the U.S.”

DatamarNews recently reported Brazil’s sugar exports reached 17.7m tons in the 2018/19 crop cycle from April 18 until January 19, compared to 24.6m tons last year. Sugar mills in Brazil have been showing a preference for ethanol production over sugar production, a result of a global sugar glut producing low returns for sugar on the worldwide market. Higher petrol prices have also fueled demands for ethanol in Brazil.

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