Brazil Suspending Tariffs on Corn and Soy Until 2021

The economy ministry of Brazil will suspend tariffs on corn and soy imports from countries outside the Mercosur trade bloc until early next year, in a bid to encourage imports amid rising domestic usage and record sales to China.  Soybean meal and soy oil imports will also be exempt along with soy imports until Jan. 15, 2021, while corn imports will cease paying the tariffs until March 31, 2021, the ministry said. The tariff on corn and soy imports from outside Mercosur, which includes Paraguay, Uruguay and Argentina, is currently 8%.

The U.S. is the world’s second  largest soybean exporting country after Brazil, and the only major soybean exporter outside of the Mercosur pact, which logically should allow imports from the U.S.  However, Brazil may not be able to easily turn to the U.S. for supplies as the latter produces largely genetically modified soybeans, creating shortage in Brazil. The country has strict rules on both sourcing and type of soybeans to be imported.