juice one use

A spike in prices for Brazilian processing oranges is threatening to push up the cost of juice.

Prices for Brazilian processing oranges have nearly doubled since the start of the year as production estimates have been cut due to unfavourable weather during blossoming and fruit setting.

Hot and dry temperatures last September and October in the key producing states of São Paolo and Minas Gerais hurt yields during the crucial fruit formation period, and the yield for 2015/16 is estimated to have fallen 15% year on year at 1.6 boxes per tree. As a result, production estimates have been cut sharply, pushing up prices.

Brazilian fresh orange production is expected to fall 14% year on year to 351.7 million boxes in 2016/17.

Production of orange juice concentrate (FCOJ) is forecast to drop 11% from last season, reaching just 885,000 tonnes. Brazilian orange juice exports are set to fall 22% year on year.

At the moment it is too early to say if the sharp price increase in Brazil’s orange market will feed through into juice prices, but given the country’s importance on the world market it is difficult to see how it couldn’t.

Brazil accounts for 60% of global orange juice concentrate production, and Europe is its biggest market - with over 70% of exports coming into the EU ports. Orange juice makes up just over half of all the fruit juice consumed in the UK. Most juice consumed in the UK is still in the frozen concentrated (FCOJ) category - much of which will come from Brazil.

The extent of the price rise is a lot harder to forecast, given the currency uncertainty following Brexit. Orange juice is traded globally in US dollars, so the drop in sterling’s buying power could impact on demand, cushioning the price increase.