The proposal being studied by the federal government to issue a provisional measure modifying the drawback regime in the Brazilian cocoa chain could result in a loss of up to R$3.5 billion in exports of fruit derivatives over the next five years, warns the National Association of the Cocoa Processing Industry (AIPC). The entity also estimates that the measure puts 5,000 jobs at risk.
Drawback is an instrument that allows the suspension of taxes on imported inputs when intended for the production of goods for export. This mechanism, adopted worldwide, serves to avoid the accumulation of taxes in the production chain, improving the competitiveness of Brazilian exporters.
Recently, the Minister of Agriculture, Carlos Fávaro, confirmed his intention to reduce the current drawback period, from the current two years to six months. This measure follows another, which temporarily suspended the import of cocoa from Côte d’Ivoire.
Continues after advertising
But the sector’s analysis is that reducing the period to six months will create a mismatch between the industrial and commercial cycle of the activity, in addition to the tax requirements of the regime. The AIPC recalls that the production of derivatives involves the importation of almonds, industrial processing and the fulfillment of international contracts often signed several months in advance.
Also read:
The entity highlights that consolidated data from the sector indicates that 92% of export contracts have a term of more than 180 days, which makes the reduction of the term in force today incompatible.
Furthermore, the association says that the change occurs in a context in which Brazil does not produce enough cocoa to supply its processing industry. Currently, around 22% of almonds used in national processing are imported, with 99% of operations carried out through the drawback regime and linked to the export of derivatives.
In other words, without this mechanism, the industry loses competitiveness in the international market and reduces its processing capacity.
Also read:
Continues after advertising
Projections indicate that, over a five-year horizon, the measure could result in a reduction in crushing between 10% and 20%, an increase in industrial idleness to more than 35% and an accumulated loss of exports of between US$400 million and US$700 million, the equivalent of up to R$3.5 billion, according to the AIPC survey.
Another expected effect is that the decrease in industrial activity will also end up reducing the demand for national almonds. Estimates indicate that domestic cocoa consumption could fall between 40 thousand and 80 thousand tons, directly affecting the production base.
“Currently, the Brazilian industry has an installed capacity of around 275 thousand tons, but it processed approximately 195 thousand tons in 2025, operating with almost 30% idleness”, warns the executive president of AIPC, Anna Paula Losi.
Continues after advertising
The association recalls that another study, prepared by the Federation of Industries of the State of Minas Gerais (FIEMG), pointed out the possibility of a retraction in economic activity, a reduction in exports and inflationary pressure resulting from the increase in raw material costs.
“The results of the study indicate that the net effect on the Brazilian economy is negative. The measure tends to increase costs throughout the production chain, reducing production and the competitiveness of the industry and resulting in job losses”, explains the chief economist at FIEMG, Joao Gabriel Pio.
For AIPC, tackling the recent drop in cocoa prices requires appropriate instruments and collaborative dialogue between the different links in the chain. According to the entity, there are more effective instruments to support producers, such as minimum price mechanisms, storage policy, targeted credit and expanded access to markets for Brazilian almonds.
