Brazil will impose a 20% tariff on ethanol imports in excess of 600 million liters/year, government ministers decided Wednesday.
The tariff was approved by ministers that form the foreign trade board Camex. A vote had been rescheduled three times since early May, due to disagreements within the government over the effects of the tariff.
Some ministers feared an import tariff could trigger retaliatory actions from other countries, including the US, which is an important trade partner of Brazil.
"I took part in the Camex meeting and we approved a resolution to tax imported ethanol by 20% for volumes that exceed 600,000,000 liters," agriculture minister Blairo Maggi wrote on Twitter.
The measure was being defended by local sugarcane mills, which have felt growing competition from imports, mainly from US corn-based ethanol.
No further details were available immediately. Camex is due to release a summary of the decision later Wednesday.
The import tax was suspended in October 2011 because Brazil was undergoing an ethanol shortage due to crop problems.
In the first seven months of 2017, imports totaled 1.35 billion liters, up from 356 million liters in the same period last year.
According to Kingsman, the agricultural analysis unit of S&P Global Platts, imports are likely to decline in the third quarter of the year amid a rise in production in the key Center-South region, but are expected to increase again in the fourth quarter as the sugarcane crush in Center-South starts to slow.
Brazil's Q3 ethanol imports are expected to total roughly 150 million liters, while in Q4 they are expected to be roughly 640 million liters.
Estimates from Kingsman show that in 2017, imports from the US could make up 37% of the ethanol consumed in north and northeastern Brazil, up from 15% in 2016.
The region has a net deficit and has also relied on transfers from the Center-South region. With a decline in production of ethanol in the past couple of years, the region has turned to imports from the US.
Kingsman estimates overall ethanol -- hydrous and and hydrous -- production in Brazil in 2017 will fall 7% year on year to 24.3 billion liters.
