Vietnam to Eliminate Tariffs on U.S. Wheat
The USDA announced on Tuesday a decree issued by Vietnam that removes the tariff on US wheat.
The decree follows the commitment made by the Vietnamese government when Vice President Harris visited Hanoi in August.
Vietnam imported 500,000 tonnes of US wheat in 2020/21, second in volume only to Australia; Vietnam on average imports four million tonnes per year.
The National Association of Wheat Growers issued a press release praising the move.
In addition to wheat, Vietnam also lowered the duties on corn from 5% to 2% and frozen pork from 15% to 10%.
FBN’s Take On What It Means The tariff cuts on wheat and corn will go into effect on December 30, 2021, while the pork duty cut will happen on July 1, 2022. US exports to Vietnam are lagging so far this marketing year with about 45,000 tonnes exported and 58,000 tonnes in total commitments, largely on the price surge from tight global stocks and tight supplies in the US. Removing the financial barrier should help sales pick up.
Ethanol Lobby Warns White House on Rollback of Blending Rules
The Renewable Fuels Association has warned that relaxing mandates on mixing gasoline with ethanol and other biofuels could make gas prices worse.
Lobby analysts also argue relaxing the rules could make the gas market more susceptible to shocks in the medium- and long-term.
The warning comes as the White House weighs alternatives to lower fuel prices, with crude reaching its highest levels since 2014 in recent months.
Relaxing the mandate could be one of the most immediate ways to lower prices at the pump, as it would free refiners from buying and blending renewable fuels.
Wholesale prices of conventional gas have recently been at their biggest discount to a 10% ethanol blend since 2014.
FBN’s Take On What It Means: Along with oil prices, ethanol margins have grown substantially in recent weeks, helping push production to hover near record levels. Removing the blending requirements could have an immediate effect at the pump, evidenced by conventional gas being significantly discounted to an ethanol blend. Regardless, the long-term attention in ag is turning from ethanol to other fuels, like biodiesel.
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