Brazil Keeps Wheat Import Tariff
The Brazilian government has said it is maintaining its 10% import duty on wheat imported from outside the South American Mercosur trade bloc, despite pressure from local millers.
With almost all of Brazil's import needs normally met by Argentina, the country's flour milling association (Abitrigo) has been lobbying the government to waive the import duty to allow wheat imports into the country from outside Mercosur.
Drought slashed Argentina's 2008/09 crop almost in half, and it's prospects for 2009/10 don't look any brighter with the government there unlikely to sanction wheat exports of more than a million tonnes in the 2009/10 marketing year.
Brazilian flour millers typically import around 6 MMT of wheat per year, potentially leaving them having to pay the import tariff on around 5 MMT in the coming season.
The Brazilian government is keen to do business with Russia, and has recently been in negotiations with the Russians to trade wheat for meat. It seems possible that their hard-line over the import duty might precede a move to waive the tax on Russian only wheat, which the local milling industry regard as inferior quality-wise to its US or Canadian alternative.
The recent highly-publicised problems with quality between Russia and Egypt will have done little to quell their fears.
With almost all of Brazil's import needs normally met by Argentina, the country's flour milling association (Abitrigo) has been lobbying the government to waive the import duty to allow wheat imports into the country from outside Mercosur.
Drought slashed Argentina's 2008/09 crop almost in half, and it's prospects for 2009/10 don't look any brighter with the government there unlikely to sanction wheat exports of more than a million tonnes in the 2009/10 marketing year.
Brazilian flour millers typically import around 6 MMT of wheat per year, potentially leaving them having to pay the import tariff on around 5 MMT in the coming season.
The Brazilian government is keen to do business with Russia, and has recently been in negotiations with the Russians to trade wheat for meat. It seems possible that their hard-line over the import duty might precede a move to waive the tax on Russian only wheat, which the local milling industry regard as inferior quality-wise to its US or Canadian alternative.
The recent highly-publicised problems with quality between Russia and Egypt will have done little to quell their fears.