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News 14.06.2016

Citrus – Industrial Yield In The 16/17 Crop May Be Limited

For the second consecutive crop, Brazilian industrial yield in the 2016/17 season might be…

For the second consecutive crop, Brazilian industrial yield in the 2016/17 season might be low, but still higher than in the 2015/16 season (the worst in the series history). According to agents consulted by Cepea, yield might surpass 260 boxes to produce one ton of frozen concentrate orange juice – some believe it will reach 290 boxes per ton.

Unfavorable weather conditions as well as fruits received before ideal maturation might hamper crop average. Brazilian growers affirmed that some processors had no restrictions in purchasing the fruit, as they crushed pear oranges in May (while the ideal would be in June). Besides, part of the early oranges that were ready was traded beforehand in the market.

This industry behavior was based on the restriction of orange supply in the new season in Brazil. Only around 200 million boxes might be processed, and ending stocks in June/2017 might be lower than the forecasted for June/2016 (which are low).

Cepea calculations point that, if the 2015/16 ending stocks estimated by CitrusBR are confirmed, yield of 260 boxes per ton (average in the last 10 years), crushing of 200 million boxes and stable sales, inventories would be lower than 50 thousand tons.

In this scenario, Brazilian processors might reduce the volume of exported juice in the 2016/17 season. Besides, many can buy juice from other states, as in the 2015/16 crop. Agents assume that processors might strengthen competition for oranges allocated to the in natura market. According to Cepea collaborators, in May, some plants offered 20.00 BRL (5.71 USD) per 40.8-kilo box for the orange contracts with higher volumes. In the spot market (with no long-term contract), average was between 16.00 BRL and 18.00 BRL per box at large processors.

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