Brazil Could Eliminate U.S. Ethanol Tariff

January 18, 2018 11:22 AM

Brazil has a 20 percent tariff on U.S. ethanol, and that could soon be lifted as gasoline prices have increased in recent months.

In 2017, Brazil placed the import duty on U.S. ethanol when the U.S. banned Brazilian beef imports after discovering unsanitary conditions in some slaughterhouses.

“There is, on the part of the U.S., a big demand to withdraw this ethanol tariff, and we also have this problem with beef—obviously one thing influences and contaminates the other,” said Agriculture Minister Blairo Maggi.

Stakeholders in U.S. ethanol say eliminating the Brazilian tariff is a major target.

“U.S. ethanol is extremely competitive on the world market,” said Tom Sleight, president of the U.S. Grains Council (USGC). “Cheapest source of octane in the world, [and] that creates some pressures, typically in places like Brazil which was our number one market.”

This news brought about extended losses to sugar futures, and is raising concerns of sugar pressuring the market.

At this time, there is no timeline for changes.

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