Orange juice prices soar to new high as poor weather hits citrus crops

Orange Juice is displayed in a Bentonville, Ark. Wal-Mart Neighborhood Market Thursday, June 4, 2015. ©Danny Johnston/AP

In one year, the wholesale price of orange juice has risen by almost 77 per cent.

Since February 2020, when the COVID pandemic struck, it has increased fivefold, according to AFP.

Some 85 per cent of the world market is divided between Florida and São Paulo. Brazil exports 99 per cent of its production.

Consequently, the United States and Brazil set the market price for this popular breakfast fruit. Problems with production affect stocks and prices in Europe for consumers and we end up with more expensive orange juice, supplied in smaller quantities.

The futures contract for frozen concentrated orange juice, the market benchmark, rose to $6500 per tonne (almost €6,000) on arrival at the European port of Rotterdam.

As with many commodities, production, export and packaging costs have also risen recently, but this is not the main reason for the soaring prices.

Production in freefall worldwide.

A few weeks ago, the citrus growers organisation, Fundecitrus, announced an estimate of a 24 per cent year-on-year fall in the Brazilian harvest, to its lowest level for 36 years, with 232 million cases expected in the coming months, compared with 307 in the previous year.

As for US production, the US Department of Agriculture (USDA) is expecting a slight increase on last year, but well below the harvest of two years ago (-36 per cent).

Fundecitrus said the main reason for the downturn was the drought that has hit the main growing regions, including the Brazilian state of Sao Paulo. The crop has also been impacted by Huanglongbing disease (HLB), commonly known as yellow dragon disease, which has affected crops in both Florida and Brazil.

Last year, AFP reported that in Mexico, another major orange producer on the other side of the Atlantic and in Spain, Europe's leading orange producer, production had also fallen by 30 per cent due to drought.

Could the breakfast staple be shunned by consumers?

The trend is for orange juice consumption to decline.

In the United States, consumption has halved in a decade, and the trend is also confirmed in Europe, though less markedly.

Orange juice brands tend to turn to other juices, and to make fruit cocktails, mixing oranges with other less expensive and more widely available fruits.

This phenomenon of falling production and rising costs has been going on for years, and many are concerned that, in the long term, oranges could become too expensive and be viewed by consumers as a luxury product.

© Euronews