Brasília – This Tuesday (9th), Brazil’s Foreign Trade Chamber (Camex), the federal government’s foreign trade policymaking body, has exempted cotton imports from tax, and raised the quota for tax-free wheat imports. The Camex had already cleared 1 million tonnes of wheat from import tariffs, and the volume was raised by another 1 million today. The exemption will remain in effect until July 31st.
In the case of cotton, 80,000 tonnes will be exempt from May 1st to July 31st. Prior to the tax break, the rate for both products was 10%. The ruling approved this Tuesday was requested by the private sector: in the case of cotton, the mid-season, which is in May, June and July, causes a scarcity of raw material for the textile industry.
Brazilian cotton imports were declining, according to figures from the Brazilian Ministry of Development, Industry and Foreign Trade, from US$ 932 million in 2011 to US$ 361 million in 2012. In the first two months of 2013, imports amounted to US$ 54.2 million, as against US$ 69.2 million in the same period of last year.
Among the five leading supplier countries to Brazil, in January and February this year, imports from China and Pakistan were down significantly. Imports from the United States were up slightly, and imports from India and Egypt grew sharply.
As for wheat, there was crop failure in Brazil and overseas, but the zero tax applies only to purchases from non-Mercosur countries. The tax break will help curb inflation by preventing foodstuffs’ prices from hiking on the domestic market, said Brazil’s Agrarian Development minister Pepe Vargas.
*Translated by Gabriel Pomerancblum with information from the ANBA Newsroom.
