The Brazilian Agriculture Ministry has temporarily halted import duties on corn, soybeans, soybean oil and soybean meal until the end of the year.
Allendale commodity broker Greg McBride tells the Iowa Agribusiness Radio Network that Brazil is trying to slow inflation fanned by rising global commodity prices.
“Global prices continue to rise,” McBride said. “That’s putting a negative spin to things domestically for their internal use. They are making it so that if farmers or these bigger groups need to bring in soybeans or corn, they are suspending those taxes or import duties so that they can continue to feed their own livestock domestically as prices do continue to rise here in the United States and around the world.”
Reports say the Chamber of Foreign Commerce had previously authorized a suspension of Brazil’s import tax on corn until March 31st of this year and soybeans until January 15th. Bill Moore is a senior account executive and author of The AgMaster Report for Price Futures Group in Chicago. He says the U.S. grains complex has benefited from this latest Brazilian measure.
“Brazil is going to put some duties on their imports,” Moore said during our Closing Market Report on Tuesday. “They are a little worried about their supply and the inflation they have had down there. As a result, they are going to put duties on their imports and that’s going to mean it’s another indication that supplies are tight. We’ve seen different countries do that. It’s not just the U.S., it’s globally that we’ve got pretty tight stocks.”
Brazil’s Ministry of Agriculture said it expected external prices to stabilize when its previous exemption was announced, however, international prices have continued to have an upward trend, putting even more pressure on domestic prices.