Brazilian sugar exports to China could fall around 800,000 tonnes in the next 12 months as a result of higher import tariffs imposed by the Chinese government, local sugar industry group Unica said on Monday. Unica's director, Eduardo Leao, said China's decision to apply safeguards on sugar imports to protect its industry was not justified. He said the Brazilian government will discuss the measures in talks with the Chinese government in the following weeks.
China currently allows 1.94 million tonnes of imports at a tariff of 15 percent as part of its commitment to the World Trade Organization (WTO). Imports beyond this receive a 50 percent levy. Monday's ruling will add an extra 45 percent duty to these imports in the current fiscal year, taking the total to 95 percent. This will fall to 90 percent next year and 85 percent a year later, according to the ruling.
Brazil is the largest exporter of sugar to China, accounting for roughly 50 percent of a market estimated by Unica at around 6 million tonnes per year. "We did an initial evaluation of the impact of the measures and we project a 28 percent fall in China's total sugar imports," Unica's Leao said in a conference call with reporters. Unica is closely monitoring Brazilian government discussions with China. Leao said the safeguards were not justified by an alleged spike in imports, claiming these, in fact, fell last year to 2011 levels.