China May Reduce Surcharges on Brazilian Agro-Products

By Lise Alves, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – Chinese authorities state they are willing to discuss the reduction or elimination of surcharges on some Brazilian products, according to China’s ambassador to Brazil, Li Jinzhang.

The surcharge on Brazilian products was among the issues discussed by Brazilian President Michel Temer and his Chinese counterpart, President Xi Jinping, during the 10th Brics Summit in South Africa last week.

“China has become Brazil’s largest trading partner and Brazil is China’s largest trading partner in Latin America,” said Li Jinzhang in an interview to Brazil’s government news agency, Agencia Brasil, over the weekend.

“Last year, fifty percent of all the soybean imports from China in the world came from Brazil. President Temer (also) made a proposal to export more soybean oil. Both sides can deepen this discussion going forward. I think this subject has a great future,” added the official.

While an agreement of decreasing surcharges over Brazilian soybean and purchasing more soybean products, such as oil and meal, instead of just the grain, is more likely to be achieved, the issue on surcharges levied by China on Brazilian poultry and sugar is expected to be more difficult to be resolved.

“Brazil’s export of certain products arrives in China at prices much lower than those in the Chinese market, causing, at times, impact in the Chinese. Because of this, producers in these industries have requested that the Chinese government survey these products in accordance with existing anti-dumping rules,” explained Li Jinzhang.

In May of 2017, China placed a 40 percent surcharge on Brazilian sugar coming into that country, which resulted in a reduction of more than 86 percent of Brazilian sugar exports to China in 2017.

In June of the same year, the Asian powerhouse instituted a provisional antidumping measure in relation to Brazilian poultry exports with a surcharge of between 18.8 percent to 38.4 percent on the value of imported Brazilian fresh, chilled or frozen chicken.

“At the moment, we are basically unable to export sugar because tariffs are prohibitive and in the case of antidumping of chicken, there is no dumping, there is no injury and there is no causal link justifying the measures,” says Pedro Miguel da Costa e Silva, who heads the economic department at Brazil’s Foreign Ministry (Itamaraty).