Brazil Hopes To Strike Beef for Wheat Deal With Russians
Brazil is the world's largest exporter of beef and the world's third biggest importer of wheat.
Russia is already Brazil's biggest beef buyer, taking more than half a million tonnes in 2008, around 25% of all Brazilian beef exports, but the South American country would like to sell Russia more.
Russia is receptive to the idea, as the EU hasn't taken up its full quota this year, and it, of course, has lots of its own wheat to sell.
There's just one problem, Brazil has a 10% import tariff on wheat imported from outside the Mercosur trade bloc. This means that most of the country's import requirements normally come form Argentina. But with the Argy crop almost wiped in half by drought in 2008, Brazil is having to look elsewhere to fulfil its domestic needs.
Brazil's wheat milling association, Abitrigo, would like the government to drop the import tariff on 1.5 million tonnes of the country's estimated 6 million tonnes of required wheat imports.
However, as the Brazilian millers prefer US or Canadian wheat, the government appears to be broking a deal to "encourage" Abitrigo members to buy Russian wheat in exchange for Russia buying more Brazilian beef.
Exactly what form this "encouragement" may take is unclear, it would seem unlikely that the Brazilian Trade Chamber will drop the tariff on imports from Russia alone when it meets on Apr 28 to decide on the matter, that would have the US and Canada rushing to the WTO crying wolf.
Russia is already Brazil's biggest beef buyer, taking more than half a million tonnes in 2008, around 25% of all Brazilian beef exports, but the South American country would like to sell Russia more.
Russia is receptive to the idea, as the EU hasn't taken up its full quota this year, and it, of course, has lots of its own wheat to sell.
There's just one problem, Brazil has a 10% import tariff on wheat imported from outside the Mercosur trade bloc. This means that most of the country's import requirements normally come form Argentina. But with the Argy crop almost wiped in half by drought in 2008, Brazil is having to look elsewhere to fulfil its domestic needs.
Brazil's wheat milling association, Abitrigo, would like the government to drop the import tariff on 1.5 million tonnes of the country's estimated 6 million tonnes of required wheat imports.
However, as the Brazilian millers prefer US or Canadian wheat, the government appears to be broking a deal to "encourage" Abitrigo members to buy Russian wheat in exchange for Russia buying more Brazilian beef.
Exactly what form this "encouragement" may take is unclear, it would seem unlikely that the Brazilian Trade Chamber will drop the tariff on imports from Russia alone when it meets on Apr 28 to decide on the matter, that would have the US and Canada rushing to the WTO crying wolf.