Sugar Futures Positioning and CFTC Update 12th October 2020

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Despite heavy pressure from the US, Brazil will maintain tariffs on US ethanol imports. Brazil increased its tariff on ethanol imported from the US from 16% to 18% this year.

The legislation is expected to come into force this year, after being approved in the Senate. Around BRL 200 billion should be invested by the end of the decade in the production of SAF, biodiesel and biomethane to meet decarbonization goals.

Brazil should soon approve the Fuel of the Future bill. It was created to encourage the production and use of sustainable fuels. Among the proposals are goals for an increase in the mixture of ethanol in gasoline and targets for the use of biomethane and SAF.