Brazil will challenge Thailand at the World Trade Organization over subsidies for sugar producers that it says have dragged down global prices for the sweetener, the Trade Ministry said.
Brazil said the Thai government has given support to cane growers and sugar mills that is inconsistent with international trade agreements, allowing the Asian country to win market share at the expense of Brazilian producers.
"These subsidies have been subject of several questionings at different committees in the WTO, but we saw no signs of changes," the Brazilian Trade Ministry said in a statement.
Although WTO cases take years before a ruling is reached, the move could potentially shake up the global sugar market, given that Brazil and Thailand are the world's two largest exporters of the sweetener.
Last year, Brazilian sugar producers said they were gathering evidence to launch the case against Thailand and India for subsidies they say could cost them $1.2 billion a year in revenue.
Brazil said Thailand's favorable policies towards its sugar sector had the effect of raising the country's exports as a share of the global market from 12.1 percent to 15.8 percent in the past four years.
Over the same period, Brazil fell to 44.7 percent from 50 percent, according to the ministry.
Thailand said that Brazil's claim was baseless.
Source: www.reuters.com