Tariff Threat Weighs on Commodities Markets

Tariff Threat Weighs on Commodities Markets

 

22 January 2025

Oil and base metals faced renewed pressure as tariff threats from the United States raised concerns across global markets.  

In the energy sector, the focus is shifting from sanctions on Russia to potential trade policies under President Trump. Brent crude fell below $80 per barrel as the president reiterated his threat to impose a 25 percent tariff on imports from Canada and Mexico by February 1. Additionally, overnight comments about a potential 10 percent tariff on imports from China in response to fentanyl-related issues have contributed to the downward pressure on oil prices during early Asian trading. Trade tensions and the risk of retaliatory measures continue to be significant factors influencing the market.  

The European natural gas market saw a sharp increase, with TTF prices rising by more than 4.5 percent to exceed €50/MWh, the highest level since the start of 2025. This was driven by an outage at the Freeport LNG export terminal in the United States, which remains shut due to power issues amid freezing weather. The facility, which has a capacity of over 20 bcm, has added further strain to the European market as the region works to offset reduced Russian pipeline flows. EU gas storage levels have dropped to 59 percent, and efforts to maintain storage above the European Commission’s target of 50 percent by February 1 remain a priority. Germany is reportedly considering subsidies to encourage gas storage refills ahead of the 2025/26 winter, although the TTF forward curve shows little incentive for players to store gas at current prices.  

In metals, base prices fell as President Trump announced plans to impose tariffs of up to 25 percent on imports from Mexico and Canada by February 1. The president also mentioned the possibility of universal tariffs on all imports but indicated he was not ready to implement them immediately. These developments have raised concerns about the potential for renewed global trade conflicts, increasing downside risks for industrial metals markets.  

In agriculture, Brazil’s agriculture agency, CONAB, lowered its coffee production estimates for the 2024/25 season due to adverse weather conditions at the end of 2023. Total coffee output is now expected to decline by 1.6 percent year-on-year to 54.2 million bags, down from an earlier estimate of 54.8 million bags. Arabica production estimates were largely unchanged at 39.6 million bags, up 1.8 percent from last season. However, robusta production estimates fell to 14.6 million bags, representing a 9.6 percent year-on-year decline. Market attention is now focused on the 2025/26 crop, with concerns growing over the impact of dry weather throughout 2024.  

Soybean production in Brazil is expected to rise significantly. The Brazilian Association of Vegetable Oil Industries (ABIOVE) projects a 11.9 percent year-on-year increase to 171.7 million metric tons in 2025, up from a previous forecast of 168.7 million metric tons. Soybean exports for 2025 are estimated at 106.1 million metric tons, while ending stocks for 2024 have declined by 22 percent to 3.6 million metric tons.  


Across commodities markets, the growing threat of tariffs and geopolitical risks continue to drive volatility, with potential long-term impacts on supply chains and global trade dynamics.

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Coffee is more than just a drink; it's a global phenomenon that transcends borders and cultures. From its mythical origins to its aromatic presence in cafes around the world, coffee has a way of bringing people together in a shared experience of bold flavors and rich history.

What makes coffee so special?

With each sip, coffee takes you on a journey through time and space, awakening your senses and invigorating your spirit. It's not just a beverage; it's a passport to different lands and traditions, a key to unlocking new perspectives and connections.

How can you embrace the coffee adventure?

Step out of your comfort zone and explore the diverse world of coffee. Try different brewing methods, sample beans from various regions, and immerse yourself in the rituals and stories that accompany each cup. Challenge your taste buds and expand your horizons with each new blend.

Why should you join the coffee revolution?

Coffee is more than just a drink; it's a lifestyle, a culture, a way of life. By embracing the coffee adventure, you open yourself up to a world of possibilities and experiences. You become part of a global community united by a love for the bold and the flavorful, the adventurous and the inspiring.

So, are you ready to embark on this coffee journey? Grab your mug, take a sip, and let the rich aroma of coffee transport you to new heights of taste and discovery. The world of coffee awaits, full of bold flavors and exciting experiences. Cheers to the coffee adventure!

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The Aromatic Journey of Coffee: From Bean to Brew
The Aromatic Journey of Coffee: From Bean to Brew

The Brew Theory of Pour Over Coffee

Why is it so tricky to brew a great pour over coffee? After all, at its heart, making a pour over is a simple process—pouring hot water over ground coffee dissolves flavor and aromatic compounds in the beans. The challenge lies in dissolving only the right kinds of compounds in coffee—and in the right proportion. To make a perfect pour over coffee is to find a coffee’s “sweet spot,” a balance of the extraction percentage and strength level we consider most delicious.

Coffee Strength and Extraction

When it comes to understanding strength and extraction, we find it helpful to compare coffee to a spice cupboard. Much in the same way spices are stowed away in a cupboard, an array of delicious flavors—aka volatile and soluble compounds—are locked inside roasted coffee beans. To be exact, coffee contains on average 30 percent soluble compounds and 70 percent insoluble compounds. But like any cook’s cupboard, it also contains a handful of flavors we don’t want—or want only in limited quantities—particularly bitter compounds that impart flavors of ash, tobacco, or carbon. What’s so fun about making a pour over coffee is how much control it gives you in pulling out exactly the right flavors at exactly the right ratio. It’s the Michelin-starred chef of coffee brew methods.

Coffee Strength

The concentration or intensity of flavor in a cup is what we refer to as coffee strength. On the palate, a coffee’s strength registers on a spectrum between watery and dense. In scientific terms, it can be measured by the percentage of dissolved coffee to water, a measurement we call the total dissolved solubles, or TDS.

For example, a well-made espresso has a TDS of between 9 and 20 percent coffee to water. By comparison, the more mellow pour over coffee has a much lower TDS of between 1 and 2 percent coffee to 98 to 99 percent water.

Strength is largely influenced by the amount of coffee you brew. In barista terms, this is referred to as the brew ratio or coffee dose. In lay terms, the more coffee you brew, the stronger the cup. At Blue Bottle, to set accurate brew ratios, we use gram scales to measure both our coffee and our water.

And we set individual brew ratios for all our coffees: We prefer our blends slightly stronger, to stand up to milk, so we generally brew them at 30 grams coffee per 350 grams water. We prefer our single origins more nuanced and expressive, so we “turn down the volume” a bit and keep their brew ratio slightly lower, at 22 to 24 grams coffee per 350 grams water.

If this seems like a lot to remember, a good way to assess a coffee’s strength is to judge its body. That is, the weight and feel of the coffee on your tongue. Does the coffee feel light like skim milk or heavy like whipping cream?

Coffee Extraction

Picture a cup of tea: Steep it too little and it will taste like water. Steep it too much and you have tar. Coffee behaves much the same way. Extraction is a measure of the quality of the solubles in coffee, which emerge at different rates the longer you brew. Those rates are influenced by time, temperature, and ratio of ground coffee to water. An underextracted coffee tastes sour. An overextracted cup is overwhelmed with bitter, even burnt flavors.

Ground coffee contains at most about 30 percent soluble compounds; the remaining 70 percent are fiber and other compounds that water cannot penetrate. But if you dissolve all 30 percent, your cup will not taste good. In a properly extracted cup of coffee, only between 18 and 22 percent of the coffee’s solubles have dissolved.

In pour over coffee, extraction is shaped by pour rate and pour patterns. It’s also impacted by grind size. Grind your beans too fine and the water will pass too slowly through the coffee, extracting too many bitter compounds. Grind them too coarse and the water will rush past the best flavor compounds, leaving you with a coffee that tastes only sour, not sweet or radiant. Grind your beans just right, and the optimal flavor compounds will dissolve in the water, leaving the undesirable flavors behind.

If this all seems like a lot to remember, a good way to assess extraction is by the coffee’s finish. Once you’ve finished a cup of coffee, pay attention to whether or not you can still experience its flavors. We often describe finish in terms of duration, how long the taste lingers, and texture, the feel of it in your mouth. Is the finish fleeting or does it linger? Does it feel smooth or rough?

Finding a Pour Over Coffee’s Sweet Spot

The trick to any method of coffee brewing is to hit the sweet spot—to balance a coffee’s strength and extraction percentage to achieve one delicious cup.

Now that you have an understanding of brew theory and the concepts of strength and extraction, we recommend you practice making a pour over coffee, perhaps altering the coffee-to-water ratio to see how flavors can either become more distinct (with more more water) or more opaque and textured, as happens with the addition of more coffee grounds. Notice if you have a preferred strength. Do your preferences depend on the kind of coffee you’re making, whether a lighthearted single origin or a hefty blend?

Play with the extraction quality, too, by honing your pour over coffee skills, from dialing in the grind to pour technique. Somewhere in this quest you’ll start to notice that your coffee becomes more resonant, with every aspect of it coming into clearer focus. Like notes played on a tuned-up piano, individual flavors start to ring, until the entire coffee, from its mouthfeel to its finish, hums like a chord progression.

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