MercoPress. South Atlantic News Agency

Brazil opens to tariff free rice, following price complaints from consumers

Up until now, all rice imports from outside the Mercosur bloc faced a 12% import duty on milled rice and a 10% duty on paddy rice

Brazil’s Executive Secretary of the Foreign Trade Board, “CAMEX,” voted on Wednesday to provide duty-free access for up to 400,000 tons of paddy and milled rice from all origins, effective this week through December 31, 2020. The measure was officially published in Brazil’s Official Gazette of the Federal Government and responds to growing consumer complaints about the retail price of rice, which with beans are staple for a majority of Brazilians.

Up until now, all rice imports from outside of the Mercosur bloc (Argentina, Brazil, Paraguay, and Uruguay), including the United States, faced a 12% import duty on milled rice and a 10% duty on paddy rice. During this three-month period, U.S. exports will be more competitive without the import tariffs, however, they will still be subject to a slew of internal value-added and transportation-related taxes.

“With rice coming out of the fields now, we are well-equipped to assist Brazil in filling this supply void,” said USA Rice President & CEO Betsy Ward. “This turn of events provides a unique opportunity for both paddy and milled rice sales.”

Ward added, “We also understand that this temporary tariff suspension is an effort to stabilize prices due to COVID-19 increased rice purchases and a drought-related supply shortage in Brazil, but we’re hopeful it will establish a precedent for importers there to turn to U.S. rice as a viable option in the future.”

Potential U.S. exports to Brazil will continue to face competition from that country’s South American neighbors, as well as major Asian exporters, who will also benefit from the limited duty-free access. U.S. exports to Brazil over the last decade have averaged less than 1,000 tons annually.