October 19, 2020

Brazil corn and soy tariffs suspended until early-2021

Brazil's Economy Ministry said it will suspend corn and soy import tariffs from countries outside the Mercosur trade bloc until early-2021 to lower food prices that are increasing inflation, Reuters reported.

Gecex, a technical body within the economy ministry made the decision to remove the tariffs temporarily.

A ministry statement said soy imports, inclusive of soybean meal and soy oil imports will be exempt until January 15 next year, while corn imports will be exempt from tariffs until March 31, 2021.

The ministry said the tariff exemptions were implemented to contain high food prices.

Food prices are affected by the record high prices for both corn and soybean, resulting in inflation and reducing Brazilians' income that has already been shaped by the COVID-19 pandemic.

Brazil's inflation in August reached its highest in four years because of increased food and fuel costs.

Corn and soybean's high prices are also affecting poultry and pork industry margins. These industries, which rely on soybean and corn for livestock feed, have urged the government to free up imports.

Corn and soybean import tariffs from outside Mercosur are 8%, with 6% for soy meal and 10% for soy oil. Countries outside Mercosur include Argentina, Paraguay and Uruguay.

In early September, Brazil's Economy Ministry decided to remove tariffs on rice imports until end-2020 due to record high prices for rice.

-      Reuters