Brazil scraps cotton import tariff until May 2011

Brazil scraps cotton import tariff until May 2011

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BRASILIA (Reuters) - Brazil has scrapped a10-percent tariff on imports of cotton lint due to fears thatexisting supplies will be insufficient to meet local demand,the foreign trade chamber, Camex, said Tuesday.

The measure will be in effect from October through May 2011and will be applied to 250,000 tonnes of cotton lint.

"The harvest had a significant drop. There won't be asufficient supply so we decided on this cut (...) until thesupply recovers," Camex's deputy executive secretary, AndreAlvim de Paula Rizzo, said.

Brazil's 2009/10 cotton crop is projected at 1.07 milliontonnes, down from 1.19 million tonnes last season, theBrazilian Cotton Producers Association (Abrapa) says.

At the start of the season, the crop was expected to reach1.28 million tonnes but dry weather in recent months,especially in main producing state Mato Grosso, trimmedoutput.

"(The textile) industry is buying a lot and carry-overstocks are very low," said Abrapa's president, Haroldo Cunha,who feared a possible shortage of the product.

Brazil consumes about 1 million tonnes of cotton lintannually. From January through July, exports reached 154,000tonnes while imports totaled 22,000 tonnes.

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