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Coffee traders seeking advance payment in new deals with Russia -Breaking


© Reuters. FILE PHOTO – A waiter in Sevastopol, March 24, 2014 counts Russian rubles and makes Ukranian Hryvnia to change. REUTERS/Vasily Federalosenko

By Marcelo Teixeira

NEW YORK, (Reuters) – Coffee traders want to pay an advance in order to make a new sale to Russia. This is after Western sanctions have hit Russia’s financial system.

Brazil is the largest country exporter in the world and the number one supplier to Russia. Traders from Brazil said that they added Brazil to the list of sanctioned and risky destinations, which includes Syria, Lebanon, and Iran.

Thomas Raad is a coffee broker who runs a trading firm that regularly ships to dangerous destinations.

Jose Marcos Magalhaes of Minasul coffee cooperative said that an advance payment will be required for Russia’s new business.

He said that co-op members would need to be able to ship as Russia’s invasion of Ukraine has resulted in container lines restricting Russian travel.

Raad indicated that he’s currently working with a Russian buyer. Raad had already sent coffee samples to be approved, and was still waiting for payment.

SWIFT is an international bank messaging system that facilitates money transfers. It said Tuesday it was still waiting on instructions about how Russian banks are to be disassociated from the system because of the sanctions.

Brazil’s exporters association Cecafe stated that SWIFT changes could impact transactions, but it was not clear at this time. The association stated that Russia had purchased 12.7 million cups of Brazilian coffee, with a value of $177 million.

Raad suggested that crypto might be an option for payment.

“I would like to take crypto, because I’m familiar with it,” he stated.

Raad stated that the Russian importer must have access to a cryptocurrency broker who can process both the first and second legs of payment. Raad suggested that the use the or, which is a digital stablecoin that’s tied to the U.S. dollars, to make this work.

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