Tariff does not prevent imports of ethanol from Brazil, new businesses are possible

© Reuters. Tarifa não impede importação de etanol pelo Brasil, novos negócios são possíveis

 Imports of ethanol from Brazil have followed strong in recent months even after importers overcome the volumes that could be purchased with tariff exemption, and new businesses are possible even with a fee of 20% extra quota before increasing consumption, said Analysts on Friday.

In October, according to the latest data from regulator ANP, the country surpassed the tariff-free quarterly quota, paying the fee on the purchase of approximately 51 million litres of biofuel.

Since September, Brazil applies tariff limits to imported alcohol, taking account of the local industry's election, which in the first semester has seen ethanol prices collapse in the domestic market because of an external purchases.

By the decision of the outer Chamber of Commerce (Camex), imports of ethanol without tariff are limited to 150 million litres per quarter, or 600 million of litres per annum for a period of 24 months. Above these volumes, there is the incidence of a fee of 20%.

"There are business in these senses, but I can't tell if you opened the window for everyone. You have to take into consideration all the taxes that buyers pay. It may be that in the northeast has compensated, "commented João Paulo Botelho, analyst at INTL FCStone.

With the prices of high gasoline on the domestic market, the sales of hydrated ethanol in the posts became more competitive and Rose 14,8% in October compared to the same month last year, according to ANP's data released on the Eve, collaborating with the external purchases of the Anhydrous biofuel, whose prices are related.

"It is still possible to import because there is a certain margin, small, but there is. By internalising the prices, there is some competitiveness. It is not a big goodwill, but it is not negative, "added Luiz Carlos Corrêa Carvalho, chairman of the Brazilian Agribusiness Association (ABAG) and director of consulting Canaplan.

Data released on Thursday by the National agency oil, Natural Gas and Biofuels (ANP) show that this free rate quota was overcome in October.

Brazil imported almost 110 million litres of anhydrous ethanol in September and more 91 million litres in October, ante 72 million of litres in the same month of last year, totaling 201 million of litres in two months.

Imports of ethanol in November, therefore, were also taxed, rezeroing again the quota from this month--there is no data from last month until now.

Carvalho, Da Canaplan, not mensurou the size of the margin to import, but explained that domestic prices are in very high levels.

This allows to fetch ethanol abroad and market it internally with some gain, especially by north-northeast buyers, closer to the United States, the main national suppliers.

In the mills, ethanol prices have been high for ten weeks, according to the Center for Advanced Studies in Applied Economics (CEPEA).

The advancement is the result of the largest demand for biofuel, which has gained competitiveness on gasoline after higher taxes for the petroleum derivative.

Data disseminated this week by the Union of the sugar cane Industry (Unica), for example, highlights the interest of the plants for the production of ethanol, to the detriment of sugar. In the first fortnight of September, biofuel manufacturing jumped over 15%.

Trend

The 91 million litres of ethanol imported by Brazil in October represent a fall from 18% before September, but are still 26,7% larger in comparison with the same month of 2016.

The quantity is distant from the peak of 257.4 million litres observed in February, when the imports were all steamed. In the accumulated of the year, from January to October, imports reach 1.7 billion litres, high of 305%.

For the next few months, a cooling shop is uncertain.

According to Botelho and Carvalho, this will depend on the demand for fuel, as the anhydrous is mixture to gasoline; The price level, which now fluctuates more freely, according to Petrobras ' Policy (SA: PETR4); And also of the stocked volume for the off season of sugarcane in the center-south, which goes until April.