2023-07-14 00:00:51
At 3,500 dollars per tonne, concentrated orange juice reached new heights in July. In particular because of the rains in Brazil which have reduced yields.
In a few weeks, the market for concentrated orange juice, already tense, contracted a little more. As expected, next year’s Brazilian orange crop looks very average with 309 million 40.8 kg cases, roughly equivalent to last year’s crop. But the abundance of rains on this new harvest linked to the El Nino climatic phenomenon affects yields. ” Oranges have a lot of water and too little dry matter explains Eric Imbert, researcher at the Center for International Cooperation in Agronomic Research for Development (CIRAD).
Insufficient stocks of concentrate
Normally, when yields drop, the concentrate is enriched with juices from previous productions, but this year, the operation is complicated. Stocks are very low following a succession of average harvests over the past three years. In Brazil, they were 140,000 tonnes in June compared to 470,000 tonnes three years ago. They can no longer compensate for the decline in production as was the case a few years ago. Because this drop is a data with which the market has already been dealing for several years. It is structural: the two major producers, the United States and Brazil, are affected by the yellow dragon disease also called “Greening”. In Florida, it has even been fifteen years since the plague has undermined production.
Price of pure juice on the rise
The breath of fresh air hoped for with the arrival of the new Brazilian harvest will therefore not take place this summer. Spot prices – for immediate sale – reached 3,500 dollars per tonne of frozen concentrated juice at the end of June. The next longer-term commercial contracts could, according to an expert, be trading at 3,500 or even 3,800 dollars per ton. Prices that could encourage manufacturers to adapt the composition of their multifruit juice. But for orange juice from concentrate, which is not blended, there will be no alternative but to pay much more. The problem is similar on the pure orange juice market, because the same fruits are used, only the processing differs. Prices rose by around 100 dollars per tonne between May and June, reaching around 750 dollars per tonne.
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