Brazil achieved an end-to-end victory against India in the sugar dispute at the World Trade Organization (WTO), as Valor found out. This litigation has an impact on the international market for the commodity and on the positioning of the two largest producers in this market. The final decision is expected to be announced by the global entity by the end of this month. The confrontation involves export subsidies and domestic support in the form of floor prices to Indian producers. When Brazil took the case to the WTO, Itamaraty calculated that Indian subsidies caused a drop in international prices and losses of at least US$ 1.3 billion per year to Brazilian producers. Brazil is the world’s largest producer and exporter of sugar. India is the second largest producer and, with the help of subsidies, has become the third largest exporter. With excess production, it manages to throw a lot of cheap sugar on the market. The WTO ruling in this dispute is likely to signal that India will need to change its legislation on export subsidies and domestic support for sugar.
Sources: Valor Econômico/Datamar News