Source: Ukragroconsult (Ukraine)
The issue of increasing the sugar export quota to the United States has been raised by the Brazilian government. This longstanding topic within the local market is gaining traction in Brasilia, particularly as a negotiating leverage against US President Donald Trump’s demands to lower the 18% tariff on American ethanol.
According to datamarnews, Brazil presently holds a preferential sugar export quota of 146,600 tons that are exempt from US import tariffs, allocated to 39 companies located in the northeastern part of the country. Historically, efforts by the government to augment this quota to between 300,000 and 400,000 tons have met with opposition. It remains uncertain if the current proposal falls within that range.
In 2024, Brazil shipped 876.7 thousand tons of sugar to the United States, earning approximately $440 million. Any amount exceeding the established quota faces an import duty of nearly 80%. Additionally, sugar produced in 26 states across the US is classified as a “protected” commodity, complicating negotiations, as per sources in Brasilia.
Government analysts emphasize the connection between sugar and ethanol – an industry in which the U.S. is aiming for increased access to Brazilian markets – which could serve as a rationale for endorsing the quota expansion. “Ethanol and sugar are inseparable in Brazil,” remarked one insider, highlighting that the majority of the nation’s biofuels come from sugarcane. In contrast, the U.S. produces ethanol from corn, a fact that US negotiators assert influences various industries during discussions about an expanded sugar quota.