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U.S. wheat gains duty-free access to Brazil

U.S. wheat gains duty-free access to Brazil

Brazil will import 750,000 metric tons of wheat tariff-free annually

By Diego Flammini
Staff Writer
Farms.com

Some U.S. wheat will start to enter Brazil without any additional duties.

Yesterday, the South American country implemented its duty-free tariff rate quota (TRQ) of 750,000 metric tons of annual wheat imports, the USDA announced.

“We are excited about the additional export opportunity U.S. wheat farmers will have with the opening of this TRQ,” Agriculture Secretary Sonny Perdue said in a statement. “Exports are critical to the success of our farmers and the United States looks forward to once again having stable access to this important wheat market.”

When Brazil joined the World Trade Organization in 1995, one of its commitments included allowing 750,000 metric tons of wheat to enter the country duty-free from other countries that don’t have pre-existing trade agreements.

Until yesterday’s announcement, however, wheat from the United States and other countries faced a 10 percent tariff.

By opening these duty-free imports, Brazil is following through on a commitment it made earlier in the year.

During a meeting with President Trump in March, Brazilian President Jair Bolsonaro said his country would open its borders to tariff-free wheat.

Brazil relies mostly on imports of wheat.

The country produced 4.3 million metric tons of wheat in 2017-18 but imported 7.0 million metric tons, data from the International Grains Council says.

Since the quotas apply to multiple countries, Brazil’s market access may not move markets, said Moe Agostino, chief commodity strategist with Farms.com Risk Management.

“If this quota only applied to U.S. wheat, then you might see some bullish movement,” he told Farms.com. “But the U.S. hasn’t been that competitive because the U.S. dollar is too high. Ukraine and Russia can undercut the U.S., too, which has been a problem for exports.”

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