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Brazil aims to suspend 10 pct import tariff on corn
SAO PAULO, April 12 (Reuters) - Brazil's Agriculture Ministry said on Tuesday it will ask to suspend a 10 percent tariff on imports of the grain from non-Mercosur origins such as the United States with corn prices hovering at record levels due to tight supplies.
Brazilian poultry and pork producers, who are struggling with high feed costs, recently closed deals to import 500,000 tonnes of corn in the coming months, most of which will come from Argentina and Paraguay.
The countries including Uruguay and Venezuela are part of the customs agreement that exempts the grain trade of a 10 percent common import tariff (TEC) on grains coming from outside the bloc.
Brazilian livestock industry associations say imports of corn could reach as much 700,000 tonnes.
Agriculture Minister Katia Abreu said in recent days that she would seek the exemption of the so-called PIS/Cofins tax on corn to try to ease prices on imports but the ministry said the Revenue Service was opposed to the measure as it would hurt the shrinking revenue stream of the government.
Removing the TEC, as the 10 percent import tariff is called, would not hurt the government's recurring revenues streams.
"We are concerned about the excessive rise in prices of food, like chicken and pork," Abreu said, who met with the head of the Revenue Service on Monday concerning the subject.
If eventually suspended, the elimination of the TEC would last between six and eight months, after which the local industry is expected to have adjusted to demand, the ministry suggested in a note.
Over that period, the United States would be a prime candidate for originating corn imports to Brazil. In 2015, the ministry said Brazil imported only 272 tonnes of corn from North America.
The ministry's proposal comes after the deterioration of the weather outlook for Brazil's approaching winter corn harvest, that is projected to reach a record 57 million tonnes. Forecasts are being lowered due to hot, dry weather that is stressing the crop.
"The measure would stimulate the purchase of grains produced in other partner markets, such as the United States," Abreu said. (Reporting by Reese Ewing and Gustavo Bonato; Editing by Bernard Orr)
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