UNICA considers an important agreement with China on sugar safeguards

Measure starts from May 2020

22.05.2019 | 20:59 (UTC -3)
Annamaria Bonanomi

Union of the Sugarcane Industry (UNICA) assessed as an important achievement the commitment not to renew the safeguard policy adopted by China for the entry of foreign sugar into the country, starting in May next year.

“The Brazilian Government was sensitive and acted quickly to reverse the impact that Chinese measures had on exports. This is an example of how, with dialogue and effective actions, the country can position itself as a consolidated player in the international market”, assesses Eduardo Leão, executive director of UNICA.

China sets an annual import quota of 1,95 million tons of sugar with a tariff of 15%. Extra-quota volumes, until 2017, had 50% tax. With the safeguard, extra-quota volumes began to be taxed at 95%, with a decreasing progression year by year until the end of the period, in May 2020. Furthermore, import preference was given to countries with a lower share of the volume – the which automatically excluded Brazil. The trade barrier was the subject of a request for consultation at the World Trade Organization (WTO) by the Federal Government, which began negotiating the reversal of the situation.

Until the start of the safeguard, China was Brazil's largest market, with exports that exceeded 2,5 million tons per crop year. In 2017/2018, with the policy in force and bilateral relations shaken by the WTO process, the volume fell to just 115 thousand tons. In 2018/2019, 890 thousand tons were shipped to the country, above what was recorded in the previous cycle, but below past levels.

“The expectation is that exports to the country will be able to return next year to pre-safeguard levels. There is also the possibility of Brazil collaborating with the country to increase the participation of biofuels in the energy matrix and, with this, meet the goals of reducing greenhouse gas emissions and improving air quality in its large cities, comments Leão .

The agreement was announced this Tuesday (21), in a joint note from the Ministry of Agriculture, Livestock and Supply (Mapa) and the Ministry of Foreign Affairs. Find out more at the link.

UNICA's activities

Throughout this period, UNICA was available to Itamaraty technicians to provide information and technical analyzes that supported the WTO process and negotiations. Since the beginning of the safeguard, the board and members of the UNICA Deliberative Council have visited China twice, meeting with representatives of the government and the productive sector. In Brazil, the entity's team met with the Chinese Ambassador and his team and, on another five occasions, delegations from the Asian country were received at the entity's offices.

“We have carried out intense work in recent years to strengthen relations with authorities and institutions representing the Chinese productive sector. We believe that the production of biofuel, in addition to sugar, can increase the profitability and stability of the local market, enabling the reduction of protectionist measures”, explains Leão.

Cultivar Newsletter

Receive the latest agriculture news by email