Brazil has reduced taxes to help the ethanol and petrochemical industries, as per Wsj.com. Brazil would cut a social security tax — known as PIS/Confins — for petrochemical companies and ethanol producers to allow them to better compete with global rivals, at a cost to the public coffer of around 1.9 billion Brazilian reais (US$940 mln) per year.
Petrochemicals firms in the U.S. have seen their raw material costs reduced by the rise of cheap shale gas production, and Brazil needs to find ways to remain competitive, Mantega said. For ethanol, the government will zero the tax, which currently adds about 12 centavos (US$0.06) to the price of every liter of the biofuel sold. The government is also providing BRL4 billion in cheap financing for ethanol producers to modernize and expand production.
Brazil, at one point the world’s biggest exporter of ethanol, has faced headwinds in recent years as sugar prices jumped–leading many sugarcane processors to switch over to producing more of the sweetener and less of the fuel–at the same time that bad harvests squeezed supplies and demand rose as the U.S. cut a tax on ethanol shipped from Brazil.
24-Apr-13 
