US cuts Brazil’s raw sugar quota by 55,900 tonnes for fiscal 2027
The U.S. cut Brazil’s 2027 raw sugar quota by 55,900 tonnes, reallocating it to 28 nations. This reduces northeastern Brazilian mills’ quota to 100,000 tonnes, causing an estimated $30 million loss. Producers plan to target the EU, though overall exports remain minimally affected.
The United States has reduced Brazil’s raw sugar import quota for fiscal year 2027 by 55,900 tonnes and decided to distribute the reduced volume among other countries, Valor International reported.
The cut will mainly affect sugar mills in northeastern Brazil, which are entitled under Brazilian law to use the preferential-tariff quota to supply the US market. Their quota has now been reduced to 100,000 tonnes, around one-third below the volumes available in recent years.
Exports beyond the quota are expected to become largely unviable because sugar imported into the US outside the preferential quota attracts a tariff of $340 per tonne. The reduction also limits access to a market that generally offers Brazilian producers higher prices than other destinations.
Renato Cunha, chairman of the sugar, ethanol and bioenergy producers association Novabio, estimated that Brazil’s Northeast could lose at least $30 million in sugar export revenue as a result of the quota reduction.
“We won’t lose all of that revenue because we will look for other destinations, but they don’t pay the same price,” Cunha said.
He described the quota reduction as “an abrupt disruption of a quota recognized by the WTO [World Trade Organization].”
Brazilian producers could seek alternative markets, including the European Union. The bloc has opened a 180,000-tonne sugar import quota under its trade agreement with Mercosur, which came into effect in May.
“We are going to start exporting now,” Cunha said. The sugarcane harvesting season for mills in northeastern Brazil begins between August and September.
Despite the impact on producers in the Northeast, the reduction is expected to have a limited effect on Brazil’s overall sugar trade balance. The United States accounts for around 1% of Brazil’s total sugar exports.
China remains Brazil’s largest sugar market, accounting for between 10% and 15% of the country’s sugar exports each year since 2020.
The Office of the US Trade Representative (USTR) said it had reallocated the roughly 55,000 tonnes removed from Brazil’s quota among 28 other countries.
India has also been included among the countries receiving preferential access, despite encouraging imports this year. For countries that are net sugar importers, the allocation will depend on the receipt of appropriate origin verifications, according to the USTR.
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Source : ChiniMandi
