Brazil to decide on import tariffs on chemicals ‘as soon as possible’

SAO PAULO (ICIS)–The director general of chemical grade group Abiquim does not expect a delay when the Brazilian governement decides whether to increase import tariffs on dozens of chemicals, because he expects a ruling to be imminent.

In a written response to ICIS, Andre Passos said the trade group “was not aware” of any potential delay to the decision that is expected in September, but could be now postponed to December.

According to press reports last month, government sources said the decision would be taken by the end of the year – but it is a move that is likely to disappoint chemicals producers in Brazil who had expected an increase in import tariffs to protect their market share.

“We are unaware of this information and are waiting for a decision to be made as soon as possible… Competing with countries that have a lower production cost structure, including lower raw materials, energy and even tax burdens, has been a recurring problem in the sector,” said Andre Passos.

“This has been aggravated by Chinese competitiveness, resulting from purchases of gas and oil derivatives at very low cost from Russia, due to war issues. What we are asking for is a correction of this inconsistency.”

In August, Abiquim said imports into Brazil remain at a high level, with 45% of the country’s chemicals demand covered by exports in H1 2024. During the six-month period, operating rates at domestic producers were maintained at a historic low of 63%.

Due to low prices and global oversupply, Brazil has absorbed a large amount of chemical imports – especially from China – which have steadily eaten into the market share previously controlled by domestic producers.

In April, Abiquim and several domestic chemical companies proposed an increase in import tariffs on more than 100 chemicals in a public consultation held by the government’s Chamber of Foreign Commerce (Camex).