Brazil Hikes Tariff on Fluff Pulp Imports from 4% to 14%

Brazil raised tariffs for imported fluff pulp from 4% to 14% on January 1, a move that is valid for two years, according to documents from the country’s Chamber of Foreign Trade (CAMEX). The product was included in a list of exceptions related to the regional trade bloc Mercosur (Southern Commom Market), meaning that country members can also apply the same imports tariff for the product if desired.  

According to the CAMEX resolution, the 14% tariff is now applied to all imported chemical wood pulp, soda and sulphate bleached fluff pulp from "coniferous trees of long fibers, in coils 25 to 50 cm wide, with humidity between 6-8%." The Brazilian trade body’s board didn’t state a reason for the new tariff, but market sources said that it is only an equalization of tariffs.

"As Brazil now has local fluff production, the government decided to increase taxes in the amount other paper products already pay, including kraftliner and printing/writing paper. The same move was made in relation to superabsorbent polymers (SAPs), production of which was begun locally by BASF in 2015," the source stated.

In March 2016, Klabin kicked off a greenfield pulp line in Brazil with capacity to produce 1.1 million tonnes/yr of bleached eucalyptus kraft (BEK) pulp and 400,000 tonnes/yr of bleached softwood kraft (BSK) pulp, the latter convertible to fluff, becoming the country’s sole supplier of this raw material. Before Klabin’s mill, the country needed to import all fluff demanded by the market, mainly from US producers and Arauco’s Alto Paraná mill in Argentina. As Argentina is part of Mercosur, the 14% tariff will not be applied to its fluff. The Board of CAMEX approved the resolution and referendum in a meeting in December and included it with other trade resolutions on the official CAMEX website soon after.