Wisconsin Ag Connection - National/World News - Brazil Seeks Cut in U.S. Ethanol Import Duties

National & World Ag News Headlines

Brazil Seeks Cut in U.S. Ethanol Import Duties
USAgNet - 04/18/2007

The United States may ease ethanol import duties by the end of next year, helping Brazilian producers gain access to markets in the world's largest consumer of the fuel, Brazil's top ethanol official said Monday. According to Bloomberg News, Brazil's government, state-controlled oil company Petroleo Brasileiro SA and private ethanol producers are lobbying the U.S. to ease a 54-cent-a-gallon duty and a 2.5 percent tariff on imported ethanol, said Angelo Bressan Filho, head of the Brazil Agriculture Ministry's ethanol division.

"I imagine it will be possible to reduce these barriers before the end of 2008," when U.S. legislators are scheduled to review the tariffs, Bressan said in an interview from New York.

The tariffs are the main factor limiting Brazil, the largest ethanol exporter, from selling more of the biofuel to the United States, Petrobras President Jose Sergio Gabrielli said Jan. 26. U.S. Energy Secretary Samuel Bodman said Feb. 14 that there is no reason to cut the tariffs until they expire Dec. 31, 2008.

Record high Brazilian harvests of grains and other crops show that increased ethanol production isn't hurting food output, as alleged by Cuban President Fidel Castro and Venezuelan President Hugo Chavez, Bressan said. Increased planting of sugar cane used to make ethanol in Brazil is occurring mostly on degraded ranch land and not in rainforest regions, he said.

Sugar prices have fallen 19 percent in the last six months as supplies from the world's main sugar producers have increased.

Brazil is the world's largest grower of sugar cane and the world's second-largest ethanol producer. The U.S., the biggest ethanol producer, makes the fuel from corn, the country's biggest crop.

Petrobras and private investors are working to install pipelines and ports to transport ethanol to world markets, Petrobras' Gabrielli has said.

All are working to increase access to the U.S., the most promising market for Brazilian ethanol, he said.