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So, because of european agricultural regulations, Brazilian drivers get cheaper fuel for their cars?

If ethanol hits it big as a fuel (which I have some doubt about) I expect the agricultural regulations on sugar to change dramatically.

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by A swedish kind of death on Thu Mar 30th, 2006 at 05:57:38 PM EST
Not really. The European regime was meant to protect European farmers from cheaper Brazilian sugar. So sugar is cheap inside Brazil, and the fact that they have been prevented form selling it at a better price elsewhere has made that sugar available inside the country, thus encouraging domestic demand, inclusing as a fuel.

And now that it appears to work, others do the same, and production suddenly cannot cope. (European sugar is still more expensive to produce than current prices, but we may end up suddenly with a situation where prices have increased enough to make European sugar profitable again withotu subsidies...)

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Mar 30th, 2006 at 06:16:08 PM EST
[ Parent ]
Now I get confused. That "European Union [...] dump subsidised sugar" does it not give Brazilian drivers cheaper (sugar) fuel? Is it not subsidiesed enough for that to happen? Don't they want our dirty eurosugar?

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by A swedish kind of death on Thu Mar 30th, 2006 at 06:48:29 PM EST
[ Parent ]
No, because it was only subsidised in Europe because it was more expensive than the Brazilian one. The subsidy was given to European farmers so that they could sell at Brazilian prices without taking the loss.

The de facto effect is to lower the international price of sugar, and to cut the profits that Brazilian producers could have made. The price that domestic sugar consumers in Brazil would have gotten without European subsidies in place would have depended on whether the government allowed Brazilian producers to sell internally at world prices or at domestic production prices.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Fri Mar 31st, 2006 at 03:04:17 AM EST
[ Parent ]

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