Brazil plays a pivotal role in supplying the United States with essential commodities like coffee and orange juice. In 2023, Brazil accounted for approximately 35% of U.S. unroasted coffee imports, making it the largest single supplier. This dominance is attributed to Brazil’s vast production of high-quality Arabica beans, which are favored by American consumers. However, challenges such as drought conditions and reduced fertilizer use have impacted Brazilian coffee production, leading to increased prices and supply concerns in the U.S. market.
Similarly, Brazil is a major exporter of orange juice to the United States. Between October 2023 and January 2024, Brazil supplied 81% of U.S. orange juice imports, up from 76% in the previous season. This surge is largely due to declining domestic production in Florida, where citrus greening disease and extreme weather events have devastated orange groves. As a result, the U.S. has become increasingly reliant on Brazilian orange juice to meet consumer demand.
The United States’ dependence on Brazilian coffee and orange juice underscores the potential impact of trade policies and environmental factors on the availability and pricing of these everyday staples:
You see, this is why you can’t have nice things, like Federal Reserve rate cuts.
When the big guy wants a rate cut but he keeps fuelling inflation.
This article was written by Eamonn Sheridan at www.forexlive.com.