Government suspends PIS/Cofins on corn imports to reduce grain costs on the domestic market

The Federal Government suspended the collection of PIS and Cofins on corn imports until December 31st of this year. The objective is to alleviate the cost of external acquisition with a focus on increasing internal supply, seeking to reduce price pressure and costs for animal breeders, as the grain is an important input in the feeding of cattle, pigs and poultry. 

The measure appears in the Provisional Measure No. 1.071, published this Thursday (23/09) and was proposed by Minister Tereza Cristina (Agriculture, Livestock and Supply), due to the drop in corn production due to the drought, and the tight supply scenario, which caused increase in the price of corn for animal farmers.

According to the MP, the contribution rates applicable to corn imports will be reduced to zero until December 31, 2021. The Provisional Measure comes into force on the fifth business day after the date of its publication.

The suspension will allow the purchase of corn from other markets outside Mercosur in a competitive manner, improving domestic supply and avoiding increases in meat prices for consumers. The expectation is that the removal of the tariff charge will represent a 9,25% reduction in the import cost or R$9 per bag.

According to the most recent survey by Conab (September), the national production of corn in the 2020/2021 harvest is expected to reach 85,7 million tons, a reduction of 16,4% compared to the previous cycle (102,5 million tons), impacted by climate problems.

Another measure taken recently by the Foreign Trade Chamber (Camex) was the removal of import tax (8%), the Common External Tariff (TEC), on corn until the end of this year, and the facilitation of purchases of genetically modified corn grown in the United States. Both regulations were proposed by the Ministry of Agriculture.

Counter corn

The Federal Government also authorized public auctions for the purchase or removal of corn stock held by Conab in order to guarantee the regular supply of the cereal, benefiting small animal breeders, including aquaculturists.

The forecast is to acquire up to 110 thousand tons to meet the Over-the-Counter Sales Program (ProVB) by the end of the year. The auctions are expected to start this month.

With the publication of 1.064 Provisional Measure, on August 17 of this year, the annual purchase of up to 200 thousand tons of corn was defined, under market conditions, to meet the Program, through the Public Stock Formation Policy. The announcement was made by President Jair Bolsonaro and Minister Tereza Cristina.