Brazilian Sugarcane Industry Association Stresses Need for Brazil's Government to Announce Ethanol Import Tariff Cut as Soon as Possible

SAO PAULO, February 9 - Today's announcement by the Brazilian Chamber of Foreign Trade (CAMEX) to
postpone a decision to reduce Brazil's ethanol import duty from 20% to zero
means it will take a bit longer for the move to be announced, but not for its
impact to take effect once the decision is made. That's how the Brazilian
Sugarcane Industry Association (UNICA) views what it describes as little more
than a "bureaucratic" delay.

According to UNICA President and CEO, Marcos Jank, the government should
still make its announcement as soon as possible, even if the measure only
becomes effective in July: "We are very encouraged by the statement from
Brazil's Agriculture Minister, Reinhold Stephanes, who said after the meeting
that it is 'highly probable' that the tariff on imported ethanol will be
dropped as of July."

UNICA originally asked CAMEX to remove the import duty in a letter sent
in October of last year. According to Jank, UNICA believes free trade is a
two-way street and Brazil, as the largest producer of cane ethanol and
largest exporter of ethanol in the world, with 60% of the global market,
should lead by example. "We should eliminate barriers, which would then allow
Brazil to pursue similar measures from countries that keep their markets
heavily protected," he added.

The United States imposes two duties on ethanol imports: a 2.5% ad
valorem tariff plus an additional "other duty or charge" of US$0.1427 per
liter (US$0.54 per gallon). According to data from the U.S. International
Trade Commission (ITC), the combined duties have amounted to about a 30%
tariff on ethanol imports, compared to the practically zero import duty
applied to fossil fuels. Moreover, ITC's own analysis last year recognized
that reducing the duty on ethanol imports would lead to a net gain for the
U.S. that could reach US$356 million annually.

As UNICA noted in a press statement on January 21, the current Brazilian
tariff has never been an inhibiting factor for imports. However, the
existence of this tariff is often criticized abroad, in the course of
discussions to open up ethanol markets, especially in the United States.
UNICA expects the elimination of the 20% Brazilian tariff, formally requested
on October 30, 2009, to become an important ingredient in these discussions
to open markets and expand the use of fuel ethanol, transforming it into a
global energy commodity.

UNICA officials have pointed out that the association's request to CAMEX
last year has no connection with the possibility of eventual ethanol imports
into Brazil because of current domestic fuel prices. "The request was made
months ago and has nothing to do with current market situations, and
everything to do with promoting global free trade in clean energy," concluded
Jank.

ABOUT UNICA

The Brazilian Sugarcane Industry Association (UNICA) represents the top
producers of sugar and ethanol in the country's South-Central region,
especially the state of Sao Paulo, which accounts for about 50% of the
country's sugarcane harvest and 60% of total ethanol production. UNICA
develops position papers, statistics and specific research in support of
Brazil's sugar, ethanol and bioelectricity sectors. In 2008, Brazil produced
an estimated 565 million metric tons of sugarcane, which yielded 31.3 million
tons of sugar and 25.7 billion liters (6.8 billion gallons) of ethanol.

MORE INFORMATION: CDN Corporate Communications - Sao Paulo, Brazil

    Rosa Webster - +5511-3643-2707 / rosa.webster@cdn.com.br
    Mariane dos Santos - +5511-3643-2730 / mariane.santos@cdn.com.br

In Brazil, Rosa Webster, +5511-3643-2707, rosa.webster at cdn.com.br, or Mariane dos Santos, +5511-3643-2730, mariane.santos at cdn.com.br, both of CDN Corporate Communications, for the Brazilian Sugarcane Industry Association