Low supply drives up Brazilian orange juice prices
As the 2024/25 market year (MY) orange crop is being harvested in Brazil, all major processors are actively running fruit. However, market sources anticipate challenges later in the season, with demand likely to outstrip supply before the 2025/26 MY crop is available. The Expana Benchmark price (EBP) for Brazilian orange juice was recorded at $6780/MT FCA EU on Jul. 31 up 74% year-over-year (y-o-y), though many processors have reportedly offered orange juice concentrate at around $7,000/MT since then. Processors are not willing to sign long-term contracts for orange juice.
The ongoing dry weather and greening disease in key growing regions have negatively impacted fruit maturation, growers have expressed concerns about oranges with lower conversion of acid to sugars, as well as the overall quality and yields. Market players have warned that the total orange crop could fall beneath the historically low Fundecitrus forecast of 232.38 million boxes, which would mark the lowest production since the 1988/89 MY. One Market player told Expana “The situation is dire and just when you think that it can’t get worse it does”.
According to market sources, there is an expectation that, once retail prices rise sufficiently, demand will drop enough to prevent further price increases. Market players have reported that demand has already decreased by as much as 20% y-o-y. However, supermarkets with lower-priced contracts still being fulfilled are managing to keep a lid on retail prices for now. Market players expect the situation to change as the 2024/25 MY crop begins to reach supermarket shelves under higher purchasing costs, potentially leading to higher retail prices.
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