Petrobras urges U.S. ethanol import tariff cut

By Claudia Parsons

UNITED NATIONS, Nov 1 (Reuters) - The United States should cut its high tariffs on ethanol imports because its production of the biofuel from corn was pushing up world food prices, the head of Brazilian state oil company Petrobras (PETR4.SA)(PBR.N) said on Thursday.

Last week the U.N. Special Rapporteur on the right to food, Jean Ziegler, called for a five-year moratorium on biofuels, saying it was a "crime against humanity" to convert food crops to fuel when nearly a billion people were hungry in the world.

Brazil and the United States are major producers of ethanol but Petrobras Chief Executive Jose Sergio Gabrielli noted that Brazilian production was from sugar cane, while U.S. ethanol was made from corn, a staple food crop whose price is soaring.

Gabrielli rejected the call for a moratorium.

"The most important thing is to control the expansion of the crops that are producing ethanol, more than to have a moratorium," Gabrielli told Reuters at the United Nations, where he was attending a board meeting of the U.N. Global Compact on responsible business practices.

Asked about rising food prices, Gabrielli said: "That's true, but that's a situation that the United States has to cope with. Because you have here very large tariff barriers, you can't bring ethanol from other sources to the United States."

"I think you have to reduce the barriers to entry, you have to diversify sources of production, you have to control the expansion in order not to go over areas that are for food production," he said.

Petrobras, which accounts for nearly all oil production and refining in Brazil, does not produce ethanol. But it seeks to become a major exporter and reseller of the biofuel in the next few years, and it is already a leading biodiesel player involved in production and research.