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Sugarcane industry: Brazil must cut ethanol import tariff

The Brazilian Sugarcane Industry Association (UNICA) says the Government should make a decision now on cutting the ethanol import tariff.

The Brazilian Chamber of Foreign Trade (CAMEX) recently said it will postpone a decision to reduce Brazil's ethanol import duty from 20% to zero, delaying the potential positive effect of the cut, UNICA says.

According to UNICA President and CEO, Marcos Jank, the Government should make its announcement as soon as possible, even if the measure only becomes effective in July.

"We are very encouraged by the statement from Brazil's Agriculture Minister, Reinhold Stephanes, who said after the meeting that it is 'highly probable' that the tariff on imported ethanol will be dropped as of July."

UNICA originally asked CAMEX to remove the import duty in a letter sent in October of last year. According to Jank, UNICA believes free trade is a two-way street and Brazil, as the largest producer of cane ethanol and largest exporter of ethanol in the world, with 60% of the global market, should lead by example.

The current Brazilian ethanol import tariff has not been an inhibiting factor for imports, UNICA says. However, the existence of the ethanol import tariff is often criticised abroad, in the course of discussions to open up ethanol markets, especially in the United States.

UNICA expects the elimination of the 20% Brazilian ethanol import tariff, formally requested on 30 October, 2009, to become an important ingredient in these discussions to open markets and expand the use of fuel ethanol, transforming it into a global energy commodity.

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