September 29, 2017 / 5:13 PM / a year ago

EU to include ethanol in trade talks with Mercosur, Unica says

SAO PAULO (Reuters) - With trade talks resuming next week between the European Union and the Mercosur bloc of South American countries, discussions are likely to include ethanol trade, Brazil’s cane industry group Unica said in a statement on Friday.

Ethanol was excluded from the EU proposal last year, Unica said, adding Brazil was “surprised” by the move because the biofuel had been part of a 2004 proposal allowing imports of about 1 million tonnes to the EU.

Unica said that the new EU offer, scheduled to be discussed from next week, will include a 600,000 tonne-quota for ethanol, of which 400,000 tonnes for industrial use.

“We consider that not acceptable,” Eduardo Leão, Unica director, said in the statement, considering the volumes too low.

The European Commission, which negotiates on behalf of the 28 EU nations, did not have an immediate comment or confirmation of the ethanol inclusion in the trade talks.

The two blocs are also expected to discuss sugar trade in upcoming rounds of talks, Unica said. Brazil has a quota to export sugar to Europe, but it is not free of taxes. Each tonne of sugar inside the quota is taxed at 98 euros.

With the lifting of sugar production quotas in Europe next month, import demand in Europe should drop significantly, Unica said, asking for the elimination of the duty inside the quota.

Reporting by José Roberto Gomes; Writing Ana Mano; Editing by James Dalgleish

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