Analysis of the impacts of the EU-Mercosur Agreement on the Brazilian sugar market

Published 2024년 12월 11일

Tridge summary

The European Union (EU) and Mercosur countries have signed an agreement that includes tariff exemptions for certain products, such as coffee and fruit, but not for sensitive agricultural items like beef, ethanol, pork, honey, sugar, and poultry. The sugar market is expected to remain stable due to the agreement, which sets a tariff quota of 180,000 tons for imports from countries like Brazil, but existing tariffs will still apply for imports exceeding this quota. The global economic scenario is projected to have limited impact on the sugar market, with the Federal Reserve expected to cut interest rates by 25 basis points, while Brazil may increase its interest rate to contain inflation and depreciation of the real.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Last week, the sugar market was marked by intense discussions about the agreement signed between the European Union (EU) and Mercosur on December 6, which is still subject to additional approvals. The pact establishes tariff exemptions for the import of certain Mercosur products into the EU, including coffee and fruit. However, more sensitive agricultural items, such as beef, ethanol, pork, honey, sugar and poultry, continue to be subject to restrictions. According to Lívea Coda, Sugar and Ethanol analyst at Hedgepoint Global Markets, for sugar, the agreement provides for a tariff quota of 180,000 tons with exemption from tariffs, but without significant changes to the existing conditions. Imports exceeding this quota will continue to be subject to the current tariffs. Currently, the sugar import system in the EU adopts a preferential structure, applying differentiated tariffs according to the origin of the product. Countries within the CXL quota, such as Brazil, Australia, Cuba ...

Source: Portal Do Agronegocio