Orange juice was one of 2012’s first commodity scare stories - prices skyrocketed 20% overnight after a controversial fungicide was found in Brazilian juice and the US halted imports.

But five months on, prices have come crashing down and - at £1,624/t - are currently 31% below 2011 levels in the US. Orange juice prices in the EU, supplied largely by Brazil, have also fallen, albeit by a smaller margin than in the US. After shooting up in January to almost £1,800/t, prices have now lost all their gains, coming to just over £1,600/t. And further EU price falls could be on the cards.

Commodity risers and fallers 19 May 2012
As crude oil prices have dropped, most of the plastics in our tracker have been pushed out of the top-five risers, although LDPE film continues to cling on thanks to a 0.8% month-on-month increase on the back of supply concerns.

Worries about industrial unrest among workers in some of Sri Lanka’s key tea-producing regions continues to underpin higher prices, with tea from the country currently up 5.9% month-on-month and 9.5% year-on-year. Meanwhile, sugar prices have plummeted to a 20-month low recently, as Brazil is expected to produce ample supplies and is thought to be considering a move away from increasing ethanol production, freeing up yet more sugar supplies.

Orange juice prices rose in January after the US found carbendazim - a fungicide legal in Brazil but banned in the US - in imports from Brazil and put a temporary stop to shipments. At the time, concerns about the impact were compounded by weather problems in Florida, which threatened to reduce the state’s orange crop.

Although USFDA officials are still carrying out fungicide tests on Brazilian imports, it is now thought there is not a widespread problem with carbendazim, but rather that some juice that would normally have remained in the domestic market got exported after Brazil had an exceptionally good harvest last year. The fears about weather problems in Florida turned out to be overblown, leaving the US with ample supplies. The EU authorities, which allow a small amount of carbendazim residue in juice, have found no traces of the fungicide in Brazilian imports.

The crash in US prices has also brought the New York price closer to the EU price, leading some experts to suspect further falls could be on the way. “Historically, the New York price trades at a premium to the Rotterdam price, which means the EU price could possibly drop,” says Mintec senior commodity analyst Robert Miles.