Orange juice prices hike as demand set to outstrip supply by summer

Orange juice demand could outstrip supply by as early as June as major producers in Brazil and southern Europe continue to deal with adverse weather and diseases, experts have warned.

Farmers in Brazil, the world’s biggest citrus producer, are currently battling greening disease, according to Mintec fruit analyst Harry Campbell.

This has forced them to harvest “untypically early” to mitigate the fruit loss, leading to lower orange juice supply availability.

The quality of the oranges used for juice conversion had also been “disappointing”, Campbell said.

He added the situation had been compounded by weak supply dynamics as Brazil’s three largest producers, which control the bulk of the country’s orange juice stock, were currently not offering to the market over fears of extreme scarcity.

According to the US Department of Agriculture, there would be a 2% year-on-year decrease in Brazilian orange juice concentrate production during the 2023/24 marketing year, which is July to June, to 1.1 million tonnes.

The country’s 2024/25 orange production is still uncertain. However, market sources have said they expect it to be even lower than the year prior.

Meanwhile, global orange juice production in 2023/24 was 10% lower than the five-year average.

This, paired with limited supply, had led to a significant hike in orange juice prices recently – Brazilian orange juice concentrate prices were up 130.5% year on year on 31 January at $5,880 per tonne, according to Mintec’s Benchmark Prices (MBP).

Supermarket prices have been consistently creeping up since the start of the year, with the Grocer’s Key Value Items tracker this week showing that the average price of own-label orange juice 1L across the mults was £1.35, or 31% (or £0.32) higher than in the same period last year.

Average prices rocketed 13% in the span of a month alone.

Egypt has recently started exporting oranges to the EU, “which has reduced supply pressure slightly and has entered the market at a competitive price”, said Mintec’s Campbell.

But production in southern Europe, particularly in countries such as Spain, is also under threat due to prolonged heat that affected crops last year.

Larger buyers were secured until the next crop, but smaller buyers that are only purchasing short-term supplies were more likely to be impacted by tight global supplies, Campbell warned.

Coldpress Juices MD Andrew Gibb said the price increases of recent months had been “unprecedented”, with its costs having doubled from 2022 to 2024.

The company “had no option but to pass on relatively modest 11%-15% price increases with most customers” this year, Gibb said.

He added Coldpress, which sources its oranges from Spain, was “relatively OK” for supplies as it built “good stock cover in 2023 and have contracts in place until December 2024”.

“We are hoping for a return to ‘normalish’ levels in Spain for early 2025,” Gibb said. The brand was combating the “orange crisis” with the launch of a mandarin orange juice “which we are able to sell at same price as our apple juices and now 15% cheaper than our flagship Valencia orange”, he added.

Raw Mockingbird Press co-founder Chris Laidlaw also said the business had seen a “steep rise” in orange juice prices “like the rest of the market”.

However, the raw juice brand has not had issues with securing long-term supplies because of its “zero km farming” method, in which it processes the fruit as soon as it leaves the tree, allowing it to “work with local farming communities and where possible purchase single crops for security of supply and quality”.

“While often this doesn’t result in best global pricing at time like this with instability, we are able to secure supply”, Laidlaw said.

Raw Mockingbird’s biggest challenge currently is that it is “extra reliant on quality as without the heat pasteurisation to dull the flavour there is no room for deviation in product quality as the fruit tastes as it does from the branch to the bottle using the cold-press process”, Laidlaw said.

British Soft Drinks Association director general Gavin Partington said crop shortages had created an “unprecedented situation in the orange juice market”.

”Producers are trying to find efficiencies to help absorb and avoid passing significant price rises onto consumers but inevitably there has been some inflation on the product due to the chronic difficulties around obtaining oranges for juicing.

“It should be noted that most other juice products are not seeing the same shortages of their constituent fruit.”