Brazil and Argentina to discuss sugar status in trade bloc

SAO PAULO (Reuters) - The status of sugar in the Mercosur trade bloc is likely to be discussed by the presidents of Brazil and Argentina when they meet on Tuesday, Brazil’s Agriculture Minister Blairo Maggi said on Monday.

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Sugar is not included on the list of goods and products subject to free trade within Mercosur, the South American bloc that includes Uruguay, Paraguay and Venezuela.

Argentine farmers fear a deluge of cheaper Brazilian sugar in the country if current levies are withdrawn.

Presidents Michel Temer of Brazil and Mauricio Macri of Argentina will meet in Brasilia as part of an official visit by the Argentine leader.

“We assured them (Argentina) that we are not going to dump our sugar in their market,” Maggi told reporters during a meeting with industrial leaders in Sao Paulo.

Brazil is the world’s largest producer and exporter of sugar and arguably the most competitive one, thanks to favorable conditions for cane cultivation and a large sugar producing industry.

Sugar was never a product on the list of products that can be imported and exported between countries free of taxes and tariffs within Mercosur and Argentine sugar producers do not expect changes in the current status of the sweetener in the bloc.

“It might be that Brazilian officials present a request (for the product’s inclusion). But we do not expect any changes,” said Enrique Nogues, head of Argentina’s sugar industry association Centro Azucarero.

Argentina’s Agriculture Ministry said Brazil could raise the issue in the talks between Temer and Macri, however.

Brazil’s Maggi said on Monday that Brazil would try to include sugar in negotiations between Mercosur and the European Union.

Reporting by Gustavo Bonato, in Sao Paulo; Luc Cohen and Eliana Raszewski, in Buenos Aires; Writing by Marcelo Teixeira; Editing by Chizu Nomiyama and Tom Brown