After two years, China has decided not to renew extra tariffs on Brazilian sugar past May 2020—when the current trade policy expires. However, while the move is certainly positive for Brazil—being celebrated as a win by both the Brazilian government and sugar producers—it doesn’t mean overall exports of the product to China will increase.
Allow us to explain.
Back in 2017, Beijing increased import tariffs on sugar from Brazil, Australia, Thailand, and South Korea—a move aiming at fostering the local market. The rule slapped a 15-percent fee on volumes of up to 1.9 million tons. Anything above that would be subjected to a 95-percent tariff (from 50 percent previously), set to progressively decrease. Currently, they sit at 85 percent.
