U.S. wheat gets tariff-free access into Brazil

Mar 20, 2019

Brazil will import 750,000 metric tons of wheat annually

By Diego Flammini
Staff Writer
Farms.com

U.S. wheat producers recently gained preferential treatment in a large South American market.

Yesterday during a meeting with U.S. President Trump, Brazilian President Jair Bolsonaro announced his country will import 750,000 metric tons (680,250 tons) of American wheat tariff-free annually.

The U.S. wheat industry is celebrating the new export opportunities.

“This is a big win for U.S. wheat farmers, the Trump Administration and members of Congress who have pushed for action on this issue,” Ben Scholz, president of the National Association of Wheat Growers, said in a statement yesterday. “I’m glad to see Brazil fulfill its commitment and look forward to a stronger trading relationship between” the two countries.

The commitment Scholz referenced relates to the World Trade Organization (WTO).

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

Brazil also applied 10 percent tariffs on wheat imports from non-Mercosur countries, which are a trade bloc made up of Argentina, Brazil, Paraguay and Uruguay.

The new U.S. market access into Brazil could have price implications for American wheat producers.

“Any time you can get into a market duty-free, that’s good,” Kim Anderson, a grain marketing specialist at Oklahoma State University, told Farms.com. “Any export demand we can get on our wheat will have a positive price impact. The 750,000 metric tons equals about 27.5 million bushels or one cargo.

“This probably won’t have a major impact on prices, but I think it could have a minor one.”

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