Orange juice prices have risen by 77% because of a drop in production in the main growing regions. There are concerns that orange juice and its fruit will be out of reach for many consumers.
ADVERTISEMENTThe wholesale price of orange juice has risen by almost 77% in one year.
Since February 2020, when the covid pandemic struck, it has increased fivefold, according to AFP.
Some 85% of the world market is divided between Florida and São Paulo. Brazil exports 99% of its production.
Consequently, the United States and Brazil set the market price for the popular breakfast fruit. Problems with production affect stocks and prices in Europe for consumers and that results in 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% 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%).
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% because of drought.
Could the breakfast staple be shunned by consumers?
The trend for orange juice consumption seems to be in a 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.
