Due to the skyrocketing prices of oranges and the decreased production in some of the world’s largest orange-producing countries, orange juice manufacturers may have to look for alternative fruits to juice.
According to data from the Federal Reserve, global orange prices in April rose to around $3.70 per pound, up from $2.80 during the same period last year.
Some experts point out that due to climate influences and diseased fruit trees, Brazil, the main supplier of oranges, is facing a reduced harvest, which has impacted global orange production.
David Branch, the manager of the Agricultural Food Research Department at JPMorgan Chase, told News Weekly, “For the past three years, orange production in the three main orange-producing regions of Brazil, Mexico, and the United States has been barely stable or declining.”
He added that orange juice inventories and frozen concentrated orange juice inventories are not enough to alleviate the shortages currently faced by juice manufacturers.
In the past, juice manufacturers used frozen juice inventories to avoid long-term shortages, as these juices could be stored and used for up to two years. However, due to the continuous shortage over the past three years, total frozen inventory levels are also decreasing.
This decrease in raw material supply has led some industry insiders to consider using citrus fruits to make juice.
According to Reuters citing data from Fundecitrus, the two largest orange-producing states in Brazil, São Paulo and Minas Gerais, are expected to harvest 230 million boxes of oranges this year, each weighing 40.8 kilograms per box. This is the second-lowest harvest since 1988-1989, with a projected decrease of around 24% from last year.
Juliano Ayres, the boss of Fundecitrus, told Reuters, “This figure surprised us.”
Citrus greening disease is a common citrus plant disease. Once infected, citrus trees produce partially green, small, misshapen, and bitter fruits. There is currently no cure, and trees usually die within a few years of infection.
Citrus greening disease severely affects the quality and yield of citrus fruits, causing billions of dollars in economic losses globally each year.
According to data from the US Department of Agriculture, citrus greening disease has caused severe damage in Brazil’s main citrus producing regions.
Branch told News Weekly, “Brazil produces 70% of the world’s orange juice, and the decrease in supply from Brazil is part of the trend.”
“The current low production is due to four consecutive seasons of low orange production in Brazil, caused by a series of issues ranging from extreme drought to high temperatures during the blooming season, combined with the ongoing presence of citrus greening disease,” he said. “As a result, the insufficient supply domestically and globally, coupled with the expected continued decrease in production, is putting upward pressure on prices.”
On the other hand, Florida, a major orange-producing region in the United States, has suffered a series of hurricanes and citrus greening disease attacks.
Branch stated that since Hurricane Ian hit Florida’s orange crops in November 2023, affecting the vital orange supply, orange juice futures market prices have soared.
Kees Cools, the Chairman of the International Fruit and Vegetable Juice Association (IFU), told the Financial Times that they have never seen such a production decrease as this year, even during major frosts and hurricanes in the past.
He suggested that juice manufacturers may need to consider other options, such as using citrus fruits for juicing, as citrus trees have a stronger resistance to the harmful citrus greening disease affecting oranges.
Cools mentioned that a possible solution could be “utilizing different types of fruits” as juice ingredients.
“The global supply shortage has resulted in futures prices higher than the normal trading range. Given the already low global orange juice supply, the recent announcement of a severe production reduction in Brazil has caused prices to hit record highs,” Branch told News Weekly.
In April in the United States, the average price of a 12-ounce can of frozen concentrated orange juice surged to $4.25, up 41% from a year ago.