SAO PAULO, Nov 7 (Reuters) - Thai sugar and cane producers are working on a proposal to change government policies for the sector, seeking to eliminate the risk of a trade dispute with Brazil, a Brazilian sugar industry representative said on Monday.
Government officials and sugar industry representatives from both countries met Thursday in Brasilia to discuss the case. A formal proposal for changes in Thai policies for the sector should be ready this month, said Pedro Mizutani, chairman of cane industry group Unica.
"What they showed us basically addresses our demands," said Mizutani, who is also vice-president for External Relations and Strategy at Raízen, a joint venture between Brazil's Cosan SA and Royal-Dutch Shell Plc.
"But we will have to wait to see if the proposals will be adopted and implemented before we can decide on the possible withdrawal of the WTO case," he added.
Brazil is questioning at the World Trade Organization some of Thailand's policies for the sugar sector, including a subsidy for cane producers that has led to increased production in the last years, even when the world was going through a long period of low sugar prices, a trend which is now reversing.
Brazil also says Thailand has been indirectly subsidizing sugar exports, which it argues breaks international trade rules.
Thailand is the world's second-largest sugar producer after Brazil. Sugar prices recovered strongly in the last year, reaching their highest since 2012. (Reporting by Marcelo Teixeira; Editing by James Dalgleish)