&w=3840&q=100)
Your coffee just got expensive as Trump launched tariff war on Brazil over Bolsonaro ‘witch hunt'
Coffee futures climbed sharply on Thursday (July 10) after former US President Donald Trump threatened to impose 50 per cent tariffs on Brazilian imports, raising concerns about global supply and the prospect of higher prices for American consumers.
In a letter posted to his Truth Social platform on Wednesday (July 9), Trump accused the Brazilian government of suppressing free speech and launching a 'witch-hunt' against former right-wing president Jair Bolsonaro. He said the US would apply the steep tariff from August 1.
STORY CONTINUES BELOW THIS AD
Arabica coffee prices on the New York exchange rose more than 3.5 per cent on Thursday morning in reaction to the announcement. Brazil is the world's largest producer of arabica coffee, which is commonly used in premium blends.
The letter is 'sending shockwaves across the coffee industry,' Financial Times quoted one trader as saying. 'The US is Brazil's main coffee buyer, so this tariff will certainly hit sentiment.'
Giuseppe Lavazza, chair of Italy's Lavazza Group, which owns the Lavazza coffee brand, had warned earlier this week of the risks tariffs posed to the industry. Speaking before Trump's Brazil announcement, Lavazza said the US's 10 percent tariff on EU goods was 'fine,' but levies on coffee producers such as Brazil and Vietnam would present a serious challenge.
'The problem is not to have tariffs between America and Europe,' Lavazza said. 'The problem is to have tariffs between US and Brazil, US and Vietnam, US and all the countries where coffee is produced. The final outcome will be a rise in the cost of coffee in the US. So the US market becomes more expensive for consumers.'
Coffee prices have surged in recent years due to poor harvests in Brazil and Vietnam, the world's top growers, coupled with speculative investment in the market. London robusta futures, the global benchmark, hit a record high of nearly $5,700 per tonne earlier this year, a significant jump from the historical average of $1,700.
STORY CONTINUES BELOW THIS AD
Prices for arabica beans also surged 70 per cent last year, reaching $4.20 per pound, but have eased recently on expectations of improved harvests.
Despite that, Trump's tariff threat could reverse the trend and rekindle inflationary pressures in the coffee market, analysts said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
11 minutes ago
- Indian Express
Zohran Mamdani — a threat to Wall Street and the US financial empire
Amidst the million hot takes about Zohran Mamdani's victory in the Democratic Party primary for New York City's mayoral race, two stood out. The first involved the undisputed don of the Democratic Party's macroeconomic policymaking and former president Bill Clinton's treasury secretary, Larry Summers, taking to X to berate Mamdani. Summers accused him of advocating 'Trotskyite economic policies… following the most problematic aspects of Britain's Labour Party' and hoped that Mamdani would learn and eventually reassure Americans who are committed to a 'market economy as an American ideal'. The second: A friend from Delhi posted a half-sarcastic story on Instagram that read, 'Congratulations to all the residents of NYC' — ribbing her fellow South Delhi folks for going gaga over Mamdani. These disparate reactions highlight two fascinating trends evident in the aftermath of Mamdani's primary win. First, the sudden burst of enthusiasm and hatred (in equal parts) around the world about Mamdani — a name that most, perhaps, didn't know until a month ago. Second, how rattled some sections of Wall Street and the larger mainstream American economic establishment and commentariat seem to be when thinking about the prospects of a Mamdani victory in November. On the face of it, the reasons for both are straightforward. New York no longer boasts the world's fanciest skyline; kids watching stray reels of Chongqing's infrastructure in interior Uttar Pradesh and Bihar might testify to this fact. Yet New York, with its filthy subway and rat-dominated streets, remains enthroned as the world's cultural capital. When a staunchly left-leaning politician rises in the city, it animates the global left and right in equal parts. This, at least on paper, explains the global fascination with Mamdani. For Wall Street and the larger US economic mainstream, the idea of rent freezes and a wealth tax might be ones they are used to hearing in the American political discourse, but these need to be kept away from New York City, the heart of the global financial system. New York boasts the broadest, deepest, and most sophisticated financial markets in the world and accounts for a chunk of the US's systemic global power. Yet, these are just symptoms of a far more structural factor behind New York's disproportionate role in the global imagination. The late Italian economist and sociologist Giovanni Arrighi presents a masterful analysis in his book The Long Twentieth Century: Money, Power and the Origins of Our Times, of how global financial centres like New York City have risen and fallen for centuries. More substantively, he contends that over the past six centuries, Genoa (the Italian city-state), Holland, Great Britain, and now the US have built capitalist global empires, which he refers to as 'regimes of accumulation'. These have had a few common features. First, each regime rests on a state-capitalist consensus, where economic sophistication arises from building world-class production and trade capabilities, supported by stable policies and institutions. This phase of development hinges on fixed capital investment driving productivity and mass consumption, seen clearly in early British and American dominance. Second, when further investments in fixed capital begin to turn less productive and cause rigidities, the state-capitalist consensus facilitates the financialisation of the economy, which leads to a rapid financial expansion across the capitalist global empire. The Genoese made the switch in the 15th century. Around 1740, the Dutch withdrew from commerce and emerged as the bankers of Europe. The British also followed suit and, after accumulating heaps of capital during the Industrial Revolution, shifted to comprehensive financialisation centred around London. Similarly, the Americans, following the industrial success during the pre- and post-war period, shifted to rapid financialisation of their domestic and global economy by the mid-1960s. Third, while each cycle of capitalist accumulation shares core traits, they differ in institutional complexity and regime sophistication. Genoa monopolised commerce but relied on external security; the Dutch internalised defence costs. Britain industrialised and absorbed both production and security. The US went further, internalising global transaction costs through its unique financial markets. This marks a clear evolutionary arc from Genoa to Holland to Britain to the US. Lastly, every phase of financialisation has carried with it seeds of the new regime of accumulation. A financial expansion has historically resulted in the flow of capital to another country, allowing it to develop production capacities more sophisticated than the incumbent, resulting in an increase in overall interstate competition and an eventual regime change. According to Arrighi, the shift from trade and production to financial expansion marks the beginning of the end of that regime of accumulation. As a side note, these four factors would have been quite instructive in predicting the emergence of the US-China rivalry. After all, it was the rise of the US financial system and the flow of its capital and technology to China that eventually allowed Beijing to become a competitor. Albeit significant, it's beyond the focus of our discussion. By virtue of evolution, the US capitalist global era has produced the starkly financialised form of globalisation, where the losers and winners have never been as apparent. While the current US regime has internalised the greatest number of costs, it is also the one regime that has overlapped the most with actual democratisation. Therefore, over the past six centuries, no other empire has faced such high domestic political costs and discontents. This is precisely what has resulted in the American political system being swept away by politicians like Donald Trump and Mamdani. How do these recurring patterns of global capitalist regimes explain the international obsession with Mamdani and Wall Street's angst with him? This is because New York isn't just the cultural capital of the world; it is effectively the capital of the US-led global financial empire. If the US created the widest and most comprehensive form of globalisation ever seen, then New York has been at the heart of it. In that sense, a small but significant upwardly mobile population across the world seems to be a part of New York's fabric and its politics. On its part, the city obliges by ensuring even its local election campaign is flooded with foreign policy debates and developments across the world. For folks on Wall Street and the like, Mamdani isn't some run-of-the-mill social democrat. He at the very least poses a challenge to the capitalist class at the heart of the US economy. He isn't just a threat to New York City but seemingly to the whole US global financial empire. Never mind that he might need some hard bargaining with Albany to fulfil his promises. The writer is associate fellow, Observer Research Foundation
Hans India
14 minutes ago
- Hans India
Market drifts lower amid tariff jitters, Q1 earnings season key to lift sentiment
Markets drifted lower during the week and lost over a per cent, primarily pressured by the lingering uncertainty surrounding global tariffs and a disappointing start to the earnings season, analysts said on Saturday. While the tone remained largely stable in the first three sessions, profit booking in the final sessions dragged the indices lower. Eventually, both the Nifty and Sensex settled near their weekly lows at 25,149.85 and 82,500.47, respectively. According to Ajit Mishra–SVP, Research, Religare Broking Ltd., sentiment weakened amid heightened global trade tensions following US President Donald Trump's renewed tariff threats on Canada and other key partners. 'Although there were expectations of an interim trade deal between the US and India, the lack of clarity kept risk appetite in check. Additionally, a weak start to the Q1 earnings season — especially after IT major TCS reported below-par results — added pressure to the markets in the final session,' he mentioned. Consumption-oriented sectors such as FMCG and discretionary stocks experienced selective buying, supported by signs of urban demand revival and improving margins. A backdrop of easing inflation, declining interest rates, and a favourable monsoon contributed to the overall positive undertone. 'Broader indices slipped into negative territory due to a lack of triggers to sustain current premium valuations and uninspiring results from a key IT bellwether, which raised concerns over FY26 earnings estimates,' said Vinod Nair, Head of Research, Geojit Investments Limited. As Q1 FY26 earnings unfold, investors are closely monitoring guidance on margins and sector dynamics. Looking ahead, the earnings season will be in full focus. A packed calendar includes results from HCL Tech, Tech Mahindra, Axis Bank, ICICI Bank, Wipro, JSW Steel, L&T Finance, and HDFC Bank, among others. On the macroeconomic front, participants will closely track the WPI and CPI inflation data scheduled for July 14 for further cues on the economy. Apart from these, the trend in FII flows and movement in crude oil prices will also remain on traders' radar, said market watchers. Globally, markets will watch for any updates related to trade negotiations and tariffs, along with key economic data releases such as U.S. inflation and 'We anticipate a consolidation phase in the Nifty index with a negative bias in the near term, following the recent fall. Volatility is expected to persist amid global uncertainties and the unfolding earnings season. Traders are advised to maintain a stock-specific approach, focusing on companies with strong earnings and relative strength,' said Mishra.
Time of India
19 minutes ago
- Time of India
Oil rises over 2% as investors weigh market outlook, tariffs, sanctions
Oil prices rose over 2 per cent on Friday as the International Energy Agency said the market was tighter than it appears, while US tariffs and possible further sanctions on Russia were also in focus. Brent crude futures settled up $1.72, or 2.5 per cent, at $70.36 a barrel. US West Texas Intermediate crude gained $1.88, or 2.8 per cent, to $68.45 a barrel. For the week, Brent rose 3 per cent, while WTI had a weekly gain of around 2.2 per cent. The IEA said the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power generation. Front-month September Brent contracts were trading at about a $1.20 premium to October futures. "The market is starting to realise that supplies are tight," said Phil Flynn, senior analyst with Price Futures Group. US energy firms this week cut the number of oil and natural gas rigs operating for an 11th straight week, energy services firm Baker Hughes said. The last time that happened was July 2020, when the COVID-19 pandemic cut demand for fuel. Short-term market tightness notwithstanding, the IEA boosted its forecast for supply growth this year, while trimming its outlook for growth in demand, implying a market in surplus. " OPEC+ will quickly and significantly turn up the oil tap. There is a threat of significant oversupply. In the short term, however, oil prices remain supported," Commerzbank analysts said. OPEC+ is the Organization of the Petroleum Exporting Countries plus allies including Russia. Further adding support to the short-term price outlook, Russian Deputy Prime Minister Alexander Novak said Russia will compensate for overproduction against its OPEC+ quota this year in the August-September period. Another sign of robust short-term demand was the prospect of Saudi Arabia shipping about 51 million barrels of crude oil in August to China, the biggest such shipment in more than two years. On a longer-term basis, however, OPEC cut its forecasts for global oil demand in the 2026-2029 period because of slowing Chinese demand in its 2025 World Oil Outlook, published on Thursday. Saudi Arabia's energy ministry said on Friday the kingdom had been fully compliant with its voluntary OPEC+ output target. On Thursday, both benchmark futures contracts lost more than 2 per cent as investors worried about the impact of US President Donald Trump's tariffs on global economic growth and oil demand. Trump told NBC News on Thursday that he will make a "major statement" on Russia on Monday, without elaborating. Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress in ending the war in Ukraine and Russia's intensifying bombardment of Ukrainian cities. The European Commission is set to propose a floating Russian oil price cap this week as part of a new draft sanctions package, but Russia said it has "good experience" of tackling and minimizing such challenges.
