Brazilian ethanol imports not seen increasing despite tax cut

March 23, 2022 |

In Brazil, Reuters reports that despite the government’s decision to cut 18% import duties on ethanol, Datagro says that the decision was politically motivated rather than economically, and isn’t likely to have much impact on fuel prices. Brazil’s president said the move would reduce fuel prices by 4 cents per liter at the pump but Datagro disagrees, especially with the sugarcane crush ramping up over the next few weeks that will lead to an increase in domestic ethanol production. Platts reports that US corn ethanol prices are soaring thanks to rising corn prices, so the import arbitrage window is firmly closed even without the 18% import tax.

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Category: Policy

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