Brazil raises import tariff on onions

The import tariff is currently 10%, but will increase to 1% from January 2018, 25. However, that increase is not in line with the Mercosul agreements. In order to comply with the mandatory Mercosul external rate of 10%, the tax will be gradually reduced to 10% in 2021. This is reported by the Agricultural Council.

The Netherlands not consulted
William Nannes, buyer at Beemsterboer, calls the import tariff increase not shocking, given the current price level of onions. "A grower probably won't notice it now, but it may cause extra pressure on the market. It is also important which price the increase applies to. Is it purely about the onion price or is it in addition to the onion price when they are on the market? The general membership meeting of the Holland Onion Association took place last week. The subject was not discussed at that time. It seems as if it was announced unexpectedly."

Mission of grower organization
It is not known whether only Dutch onions will be extra taxed with the higher import rate. The Brazilian onion growers' organization Anace previously argued for an increase that will affect all suppliers from the European Union, reports the Brazilian news site Canal Rural. The organization therefore requested an import tariff increase of 35%. The main supplier of onions to Brazil is neighboring country Argentina. In addition to the Netherlands, Spain is also a major exporter from the European Union.

Unfair competition
The reason for the higher import tariff is unfair competition. The average price of Brazilian onions costs 16,50 Brazilian real (€4,26) per 20-pound bag, according to the growers' organization. However, Dutch onions are imported for 14 real (€3,61), according to Anace.

"Growers have sold their onions below cost price and gone into debt to pay for seed and fertilizer," says Anace chairman Rafael Jorge Corsin. "85% of all growers are family businesses. Companies are going bankrupt due to unfair competition from the Netherlands."

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Dutch onion exports to Brazil are very erratic.Will Brazil enter the market?
Now that the year-end is approaching, the onion sector is eagerly looking for alternatives for Africa. Brazil was missed last year and this year the Netherlands hopes to serve the country again. However, Nannes has not yet noticed any signals from the country. "Brazil is such a huge country. They have 5 to 6 harvests a year. If 1 fails, there may be a gap for the Netherlands to fill. The stories go that Argentina didn't have a great harvest. We should not expect any competition from Spain. They are currently importing Dutch onions themselves because they do not have enough product. These are very rough measurements."