Brazil proposal to solve sugar spat meets resistance

Brazil has proposed that China introduce a quota for imports of Brazilian sugar that face a 50 percent levy, in an attempt to solve a trade dispute between the two countries, but China is resisting the plan, a person close to the negotiations said on Friday.

Brazil is the world’s top sugar producer, and the dispute that has curbed exports at a time of a mounting global sugar surplus, seems set to rumble on.

China currently allows 1.94 million tons of sugar imports a year at a tariff of 15 percent as part of its commitment to the WTO. Imports beyond that level face a 50 percent levy.

Last May, China introduced an additional 45 percent duty on imports from several countries, including Brazil and Thailand, to defend the domestic industry from what it identified as a surge in imports.

At the time, Brazil’s sugarcane industry said the duty, amounting in some cases to 95 percent, was unjustified.

Brazil has since proposed that a limited amount of shipments be exempted from the extra levy, the source said.

China has resisted the plan but, as yet, there been no formal request for action at the WTO level, the source added.

Brazil used to be the largest exporter of sugar to China, accounting for roughly 50 percent of a market estimated by industry group Unica to be around 6 million tons per year.