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From mangoes to macchiatos.
First was the climate change.
So that had impacted with the, you know, availability of mangoes when the export order arises.
Every day we saw the coffee prices going up, going up, going up.
Breaking records.
It's World Business Report from the BBC World Service.
I'm Leanna Byrne.
India's mango producers are racing to get fruit to the US as shipping costs climb.
How climate change and tariffs are shaping coffee prices.
An outdoor clothing company, Patagonia, faces backlash after suing an environmental drag performer.
But first, new figures are suggesting that American consumers are starting to feel the strain of higher prices again.
U.S. consumer spending edged up by 0.1% in April once inflation was factored in.
At the same time, inflation climbed 3.8%, the highest level since 2023.
With me now is Kerry Leahy. economist at Columbia University.
Kerry, thanks for joining us.
Oh, you're very welcome.
So is the message here, Americans, they're spending money, but only just?
I think that's probably about right.
I think you should suspect that over the next six to 12 months, real consumer spending, which tends to grow at a 2 plus pace, may have a hard time even gaining that.
As we probably already know, there's sort of a bifurcation where The better off individuals are spending more than those in the lower ends of the income stream.
And that seems to be the case in most of the figures you've been seeing.
But in addition to the bear increases in real after.
Inflation, consumer spending.
You are seeing, as you mentioned, a pickup, if not a surge, in headline inflation, which is obviously powered by oil and, to a lesser extent, other materials like food.
Now Kerry.
There was this line in the data saying incomes were basically flat, while savings fell to the lowest level in years.
Can you paint a picture of me what that looks like in a household?
How are people spending?
How are people keeping money back?
Well, generally the way the US tax system works is, taxpayers have been getting payments or refunds of about 3500.
And that's probably about $500 more than the average in the last five years.
And that money has probably gone into paying off their higher energy bills, particularly oil.
On gasoline and also to provide a cushion, they are cutting back on their pace of saving.
So you're seeing a combination of some slowdown in actual spending and a drawing down of savings to make sure so they don't cut their spending too abruptly.
And they're using savings as another way to deal with that issue.
All right, Kerry, you stay right there.
We're going to talk about a few household items that are going up on price.
And first we're going to go to India, where it is mango season and which means the race to get mangoes to customers around the world is underway.
But soaring shipping costs linked to the conflict in Iran, combined with poor harvests caused by extreme weather, are putting huge pressure on exporters.
Earlier I spoke to Sridhar Phutuk from Shirvali Agro, part of the Shibi Konkan farmer-producer company in Maharashtra in India.
He says his margins are being squeezed badly.
The season this time was affected largely, nearly like 80%.
We didn't get any produce.
On an average.
We come from the yogurt belt, which is the geographical indication for Alfonso mangoes.
So we have just checked and the government statistics say that there's only production of 15 to 20 percent throughout the day were built.
Now, Reuters was reporting that your shipments are down significantly this year.
So there are twofold impacts.
First was the climate change.
So that had impacted with the availability of mangoes when the export order arises.
The second impact came from the US-Iran war.
Because of that, the air freight was kind of doubled this year.
We had like nearly 40 of business.
Which kind of we lost because the prices were just too high for a few of the importers.
And how much money are you losing exactly?
I would say it's around like half a million like we have lost just for this year.
And I would put ourselves, you know, as a medium exporter, there are even bigger players than us.
I believe that impact will be much higher for them as well.
What business decisions are you having to make off the back of that?
Are you having to let people go?
Are you having to change things like the way that you're processing things or even future thinking?
So we had an expansion plan for this year.
We wanted to convert our existing packhouse to an export grade packhouse, which involved a kind of investment around, you know, 650k US dollars.
So that is something which we have put on the back burners.
We tried to mitigate these issues this year by, you know, diverting to Oceania market segment, that is, Australia and New Zealand.
But again, that was also impacted because it is also very long freight charges over there.
And we also tried to, you know, risk mitigate the issues by having mangoes sold in tier one Indian cities as well.
Because of the higher fuel prices, even the same impact was observed within India as well.
Can you tell our listeners outside India who buy Alfonso mangoes in the supermarkets or possibly they buy them online what changes are they likely to notice this year?
They might see two things.
One is, the sweetness of the mangoes will be less, because not all mangoes exported will be of the top grade export quality.
People will try to hamper and scamper. and try to push whatever Alfonso mangoes they have.
The second direct impact will be on the pricing aspect because, as I told you, the air freights are very high.
And because the mangoes are also very less, there's a good chance.
The typical demand-supply equation will come into picture and the price will hike over there as well.
And the third impact which we have observed is the heat wave.
The heat is kind of very high.
So we have observed there's a lot of quality issues.
So with climate change and with a season like this, you must be quite worried for the future.
Absolutely, because there are a lot of young farmers like me, and even my relatives, who want to get into this farming business.
But for a young person who wants to get away and get into farming, he or she will also think twice that whether this is having a future for us.
That was mango producer Sridhar Futok from Shrivali Agro in Maharashtra in India.
Now, while growers and exporters in India battle rising costs and lower supplies, demand for the fruit in the United States remains strong.
The BBC's Samir Hussain reports from Newark Liberty International Airport in New Jersey.
Fresh off a plane from India, some very precious cargo.
Oh, it's exquisite.
That is the real mango smell.
Indian mangoes are only available a few weeks a year but in high demand in America and big business.
How much money would you say that you brought in last year in mangoes?
More than a million dollars.
That's just 7% of last year's Indian mango imports to the U.S.
I cannot even describe that smell.
It is so sweet.
Importing mangoes is a side hustle for Bharat Kumar Prasanna.
A chemist by trade, mangoes by passion.
The mangoes that you get in the U.S. would have... It's like a potato.
It's a double fruit.
Okay, so 408 boxes in here.
And probably like $50 a box.
Average $40 to $50.
You're looking at about a little more than $20,000 worth of mangoes.
Since they can only be imported by air, the ephemeral fruit comes at a bitter price.
The supply chain price is high, gas is high, paying to the people is high.
So, yeah, everything is adding too much.
Viral Shah delivers the mangoes from the airport to a nearby Indian grocery store.
Actually, it's an amazing feeling, man.
This is coming from home, motherland, you know.
And this season, everybody's waiting for it.
Three months, you know, they know we're going to get after that.
We won't see it for another year, you know.
So it's actually a great feeling.
In India, the mango would cost about 70 cents.
But in the store in New Jersey, it's seven times that price.
Once in a year.
But the taste of home is priceless.
That was Samira Hussain in New Jersey.
Now let's talk about coffee, because is over $6 for a coffee the new norm for our caffeine fix?
Typically, the price is already well over $5.
And with specialty milk it can easily get to six in major cities in the UK.
As a coffee bean price shock caused by tariffs and climate events collide with changing consumer trends,
But is it a price people are happy to pay?
Our economics editor, Faisal Islam, went to Turin in Italy, home of the largest and oldest coffee roasters in the world, to investigate.
I'm standing in front of what looks like a sort of locomotive train engine, which is, in fact, the first espresso machine from Moriondo 1884.
At that point, it becomes a staple drink in Italy and a drink of the masses, a cheap drink.
And it's been like that for decades since.
But in recent years, that price point has increased.
And it does raise the question, how do you deal when a price shock comes through an industry?
Does it change it forever?
This is a pretty good place to find out.
Welcome in the museum, in Lavazza Museum.
I've come here to meet Giuseppe Lavazza.
His great-grandfather launched the famous coffee brand 130 years ago.
Giuseppe is now chairman of the business.
I begin by asking him what's causing the current volatility in the coffee market.
This kind of business has been affected for many years by climate effects.
So when we saw a frost in Brazil in 2021 after COVID, the effort was devastating and the tension of prices lasted for about four years.
And then the inflation record price dropped.
Geopolitical crisis, the Swiss Canal.
Now another big crisis, another war, President Trump tariffs.
So really we went through incredible difficulties.
A long list of troubles have combined to create a perfect storm.
Every day we saw the coffee prices going up, going up, going up, breaking records.
Speculation, of course, stepped into the business and started to ride this great opportunity, exactly as happened in Cocco, the same
It's not just the financiers playing the markets.
Part of Vietnamese coffee farmers' daily ritual now involves the 430am morning app check of the Robusta Futures price in Vietnamese Dong.
Farmers that could harvest enjoyed extraordinary windfalls from last year's prices and are storing hundreds of thousands of bags of coffee which otherwise would have been exported.
Even aside from the weather, President Trump's tariff rollercoaster saw extra taxes applied to the world's biggest coffee producers before the White House saw the very visible impact on US domestic coffee prices and road back.
Prices have settled down from peaks, but still at much higher levels.
So is the £5 latte a temporary aberration in our cups we can now forget about?
Not yet, unfortunately.
We have to wait for at least a couple of years because we need two big crops, from Brazil and from Vietnam, arriving on the market.
That's going to create different market conditions, more stability, more visibility long term.
And so the chance, of course, of rebalancing the value all over the supply chain.
Is coffee a danger, though?
That coffee is now a luxury item that, particularly for younger consumers, they won't be able to afford it.
It's more expensive, but fortunately speaking, it's not a luxury.
So it's still something that people love to drink.
So despite high prices, the elasticity of coffee is very low.
People need their fix, it appears, and whether it's the El Nino-related crop destruction, geopolitical chaos or rising rents and wages, the elevated prices paid remain rather sticky.
And you can read the full piece by Faisal Islam on the BBC News website.
Kerry, is a coffee price elastic or inelastic?
Well they, the producers, are certainly hoping it is relatively price inelastic and people will still need their caffeine fix every day even if prices are sharply higher.
Because if you say to yourself, what can you go to?
That might not be quite as – expensive and similar, maybe tea, but there aren't too many other substitutes for coffee other than coffee.
But there's always a point where people just stop, right?
That they can't afford it.
Oh, well, yes.
You would certainly think in a downturn people would then move to coffee substitutes.
The old bit about well, we can't afford coffee, but we can afford Sanka.
That may happen, where the powdered coffees, which are certainly not as cool, would certainly fill the bill when your wallet is pretty empty.
How much is the price for a price of cup coffee in New York these days?
Well, if you're lucky, you get it for under four.
But if you go to one of the high-end national chains it's probably the average price is well over 5.
All right.
Okay.
Well, listen.
Speaking about dollars, US-based discount store Dollar Tree has seen a surge in first quarter earnings, with shares jumping almost 18.
What is that saying about the U.S. economy?
Well, it's saying really that the company can ram through some fairly substantial price increases.
That's where they're making their money.
Actually, people are visiting the store and spending in real terms a bit less.
So this is one of those things where –
People that go to Dollar General don't have a lot of other alternatives.
And so if the prices are increased, they don't have a lot of short-term alternatives.
And so it's really a story about the pricing power of the retailer rather than the resiliency of the lower-end consumer.
And then on the flip side, we have the company behind the handheld gaming computer, Steam Deck.
It's raised prices on some models by more than 40%.
That's huge.
Are people paying that?
Absolutely.
Well they are, and there is a considerable worry that it's becoming an extravagant sport and that available only to the well-to-do, because the prices are just phenomenal.
I'm not involved in that space forever, but – at any time.
But these are eye-popping increases.
It's hard to think they can make them stick if we run into any kind of problem with the economy in the next 12 months.
Well, I guess somebody is paying it.
All right, Kerry, you stay right there.
I'll come right back to you.
You're with World Business Report from the BBC World Service.
The European Union is preparing to toughen its trade defences against China, amid growing concern in Brussels that cheap imports are putting pressure on key European industries.
The EU's industry commissioner, Stéphane Sejournet, has told the Financial Times...
The bloc will expand the use of tariffs and import quotas to protect sectors including chemicals, metals and clean technology, which he says are at risk from unfair Chinese competition.
But Beijing has accused the EU of protectionism and warned the measures could damage trade relations.
Linlin Liang is Director of Communications and Research at the China Chamber of Commerce to the European Union.
Our perspective is just not true and we hope that we can have a more objective view of the structures of the trade and, you know, to have a more rational perspective.
Well, one of its main arguments, Brussels' main argument, is that Chinese companies they benefit from heavy state support.
What do you think about that?
Is that fair competition?
Well, first of all, subsidies are not illegal by nature.
Subsidies are allowed according to WTO rules.
So you have to define...
First of all, whether there are subsidies.
And secondly, you have to see whether subsidies distort the internal market.
It's easier, or it's very compelling or, to some observers, to simplify everything towards the subsidies.
But, as I said, it's very important to notice that the strength of Chinese manufacturing is really based on innovations and competition.
But it has led Europe to say it wants to de-risk from China.
Now it's not saying it wants to decouple completely, but I guess from your perspective and Beijing's perspective is there really a difference between that.
And does that cause problems between the relationship between the two powers?
Yeah, all the discussions about de-risking or decoupling has been quite concerning.
Although that there is a doctrine of de-risking, not decoupling, But in some key strategic areas we observe that a certain kind of decoupling is happening or could happen in the future, in the very, very near future.
And in this sector could concentrate, for instance, in the sectors associated with decoupling, very advanced technology sector and key strategic sectors.
So when you say you're concerned about the decoupling, are you saying that you might see or we might see, rather a genuine confrontation, trade confrontation between Europe and China.
This could be one of the consequences.
I don't know if you have noticed that Chinese business and together also with the Chinese Ministry of Commerce, they already voiced quite serious concerns about the possible measures crossing a very wide range of areas and to exclude Chinese suppliers, for instance, from the procurement and from the EU-funded projects.
And this will really lead to a very large-scale trade frictions.
And China already mentioned that it will consider countermeasures if the EU insists on doing that.
It could be the beginning of the downward spiral or the beginning of the circle which the business community really doesn't want to have.
Well, another part of the story is the EU has fined Timu and is now investigating JDcom under its foreign subsidies regulation.
Chinese companies now feel they're being specifically targeted by Europe.
Today's announcement, we noticed that the TEMO is not yet profitable in Europe.
It's still quite young.
And I think the 2 million fine is quite disproportionate.
If you see the business performance, we noticed that the decision was made based on some old data.
I think it's before 2023.
But since then, I think there were some new changes.
Probably the commission hasn't taken into account.
All in all, we found that in some sectors that Chinese companies are targeted.
In sectors that the Chinese companies are leading the clean tech, e-commerce and a lot of areas that we are faced with obstacles or barriers or market access difficulties.
That was Linda Liang, Director of Communications and Research at the China Chamber of Commerce to the European Union.
Kerry, there's a game theory element here, isn't there?
If China subsidises heavily and then Europe is responding with tariffs, it's going after the likes of Timu JDcom.
Does that risk an escalating cycle where everyone becomes more protectionist?
Oh, absolutely.
It's hard to get around that conclusion in the current environment that you just keep erecting barriers because you're making a decision as a policymaker that these areas are too important just to be left to business alone.
And so there will be restraints to trade.
Now, let's have a look at this one.
The AI giant Anthropic, it says it's raised $65 billion in the funding round.
That would value the firm at just under a trillion dollars.
That is a lot of money, Kerry.
So what was it likely to do with this money?
And also, this is right before it's supposed to IPO, isn't it?
That's right.
I mean, these companies are generating a lot of revenues.
They're increasing in size and value even faster than revenues.
And it's hard to imagine getting any better for them.
And then it does.
In part, the funding they're getting is from some of their chip suppliers.
So it's just one big happy family organization. enjoying hefty increases in valuations.
But I think the only conclusion I can come up with, being an old-time naysayer, is the only winners are going to be those that are producing the data centers.
It's the old remark about the California gold rush.
You want to make the money on giving them the pickaxe, not the gold itself.
Yeah, there's golden them-hells.
All right, Kerry Leahy, economist at Columbia University in New York.
Thank you so much for joining us.
Now outdoor clothing company Patagonia is suing US environmental drag performer and climate activist Patty Gonia over a trademark dispute.
The company says her drag name is too close to its own brand and could damage its reputation.
But the performer, whose real name is Wynne Wiley, says the lawsuit threatens the erasure of my name, my advocacy and my community.
Hi everyone, it's Patagonia.
Today I'm breaking my silence about the lawsuit that the multi-billion dollar corporation Patagonia has filed against me, a drag queen and climate activist, for trademark infringement.
Camelia Iman is co-founder and managing attorney at Imani Law in California.
Hello, thanks for joining us.
Hi, thanks for having me.
So at the heart of the dispute is a trademark law.
Explain this to me.
What exactly will a court be looking at when it's deciding whether Patagonia infringes on Patagonia's brand?
Yeah, the central question in any trademark case when it comes to likelihood of confusion are a couple factors.
They look at how similar the marks are, and in this case, phonetically, Patagonia versus Patagonia.
They'll also look at how related the goods and services are.
So there is an overlap here with apparel and the environmental advocacy.
And then There's going to be.
I know Patagonia has pointed to social media comments where people thought the merch was a Patagonia product.
So now Patagonia's team is going to have to push hard back on those factors.
It's interesting, Patagonia says it has to defend its trademark or risk weakening it legally.
Do major companies genuinely have little choice in cases like this, even when the other side is a small creator or it's an activist?
Yeah, I mean, that's the part I think that's really frustrating for a lot of creators, and I get it.
The reality is that under trademark law, if you don't enforce your rights, you risk weakening them.
So if Patagonia lets this go, then you know who's to say the next person who does something similar.
They can point to it and say you didn't stop her, so you can't stop me.
And that's just how the system works.
Is there other examples of this legally?
Where's the line between protected satire or commentary and then something a court could see as brand confusion?
Yeah, this is where it gets really nuanced.
Parity can absolutely be a defense in trademark cases, but courts they tend to protect expressive use.
I think once it comes to commercial use, that's when it's harder to rely on parity.
This case, it also reportedly involves a 2022 agreement limiting how the name could be used commercially.
So how significant could that previous agreement become now that Patagonia has expanded into merchandise and a larger business?
Essentially,
Yeah, so I mean, in that case, I don't remember if she actually signed if there was a contract.
In that case, Patagonia could say that she knew that there was some sort of likelihood of confusion and that's why they came to her.
At the end of the day, you know, they're not asking her to stop using her name.
But if there is an overlap in goods and services Patagonia, regardless of that will you know, have a case to say hey, this is infringing on our rights.
People have been speaking out, though, on social media.
So could there also be a reputational risk here for Patagonia, particularly given its strong public image around environmental and progressive causes?
It seems strange.
Yeah, I mean, there's definitely I definitely think the public perception is team Patagonia.
And I get it.
You know, you always want to protect small creators as well.
But the reality of trademark law as well is that with Patagonia it does come back to the fact that if they don't protect their branding, then it does weaken their mark.
And technically, that is what you're supposed to do when you have a trademark.
There is instances though, where we often see brands collaborating with influencers who parody them online.
So why do some companies lean into that culture?
And then you've got somebody like Patagonia taking legal action.
Yeah, it's a good question.
I mean, it could come down to a couple things.
In this case, maybe it could be that Patagonia her merch sales are significant maybe, and that's why they want to reduce the infringement.
Maybe they didn't know that there would be this public pushback.
Maybe they didn't anticipate that.
That could be that as well.
If Patagonia, the company, wins, what does that realistically mean for Patagonia?
So does that mean she has to change the name, remove the merchandise, financial damages perhaps?
Yeah, good question.
I mean, I did see that they're only suing for a dollar, so it doesn't seem like they want to stop her from using the name.
And you can't do that at the end of the day.
She can still use her name.
What they're specifically looking at is they want her to stop having the trademark and selling goods in overlapping locations in the overlapping section.
So for example, the merchandise.
And then very quickly, if Patagonia wins, what happens then?
Yeah, I mean, that's a really good question.
I mean it's going to look at a couple factors, but the courts will be looking at whether the marks are similar and where there is confusion.
I mean, they're not going to look at public outcry.
They're not going to look at that, but...
Yeah, it would really come down to the factors I mentioned earlier, which is how related the marks are and the overlap of services.
Camilia Mani, thank you so much for joining us.
That's it from World Business Report from the BBC World Service.
Hi, this is Janet Jalil from the Global News Podcast.
We're covering the course of condemnation of Russia from NATO and EU leaders after a drone crashed into an apartment block in Romania, injuring two people close to the border with Ukraine.
Search for the Global News Podcast wherever you get your BBC podcasts.
