Brazil will impose a 20% tariff on ethanol imports in excess of 600 million liters/year, governm

ent ministers decided Wednesday. 

The tariff was approved by ministers that form the foreign trade board Camex. A vote had be

en  rescheduled  three  times  since  early May, due to disagreements within the government 

over the effects of the tariff. 

Some  ministers  feared an import tariff could trigger retaliatory actions from other countries, 

including the US, which is an important trade partner of Brazil. 

"I  took  part  in the Camex meeting and we approved a resolution to tax imported ethanol by 

20%  for volumes that exceed 600,000,000 liters," agriculture minister Blairo Maggi wrote on 

Twitter. 

The  measure  was  being  defended  by  local  sugarcane mills, which have felt growing com 

petition from imports, mainly from US corn-based ethanol. 

No further details were available immediately. Camex is due to release a summary of the deci 

sion later Wednesday. 

The  import  tax was suspended in October 2011 because Brazil was undergoing an ethanol 

shortage due to crop problems. 

In the first seven months of 2017, imports totaled 1.35 billion liters, up from 356 million liters 

in the same period last year. 

According to  Kingsman,  the agricultural analysis unit of S&P Global Platts, imports are likely

 to  decline  in the third quarter of the year amid a rise in production in the key Center-South 

region,  but  are  expected to increase again in the fourth quarter as the sugarcane crush in 

Center-South starts to slow. 

Brazil's Q3 ethanol imports are expected to total roughly 150 million liters, while in Q4 they ar

e expected to be roughly 640 million liters. 

Estimates  from  Kingsman show that in 2017, imports from the US could make up 37% of the 

ethanol consumed in north and northeastern Brazil, up from 15% in 2016. 

The  region  has a net deficit and has also relied on transfers from the Center-South region. 

With a decline in production of ethanol in the past couple of years, the region has turned to 

imports from the US. 

Kingsman estimates overall ethanol -- hydrous and and hydrous -- production in Brazil in 201

7 will fall 7% year on year to 24.3 billion liters.