Brazil: Higher supply should keep pressing down oranges quotes in May
As the harvesting of the 2019/20 orange crop steps up in the orchards of Sao Paulo, citrus prices dropped in the in natura market in April – this scenario should still be observed in May. Besides the higher supply of all varieties, the share of fruits that have not reached the ideal maturation stage for the in natura sector yet increased pressure on quotes.
As the harvesting of the 2019/20 orange crop steps up in the orchards of São Paulo, citrus prices dropped in the in natura market in April – this scenario should still be observed in May. Besides the higher supply of all varieties, the share of fruits that have not reached the ideal maturation stage for the in natura sector yet increased pressure on quotes.
Concerning early oranges (rubi, hamlin and westin, for instance), trades have been closed since March. However, only in late April these fruits reached a maturation stage closer to that demanded by the in natura market. Thus, the average price for hamlin oranges last month was 23.78 BRL per 40.8-kilo box, on tree, 14 % down compared to that in March.
As for pear oranges, the first fruits from the 2019/20 crop that were harvested had lower quality for the in natura sector, which pressed quotes in April. Thus, the price average last month, at 31.80 BRL per 40.8-kilo box, was 24.7 % lower than that from March. According to Cepea collaborators, the harvesting anticipation was an attempt of taking advantage of the high price levels – as growers are aware of the estimates indicating that the 2019/20 crop should be larger than the 2018/19, they fear that the prices paid for the fruits may drop sharply in the coming months.
For May, oranges quotes are expected to keep dropping, at least in the first fortnight. Besides the forecast for higher quality and supply in São Paulo, the crushing pace at processing plants should continue slow in the first days of the month. This scenario leads the early oranges that would be allocated for crushing to be sold in the in natura market.
2019/20 CRUSHING – The growers from São Paulo believe that the orange production in the 2019/20 season may be up to 40 % higher than that from 2018/19, based on orchards higher productivity. Higher supply in the new season, however, should allow the opening of new plants of the large-sized processing plants from SP this month. Higher crushing, however, is forecast only for June, when most fruits should reached the maturation stage desired by the sector.
Currently, only two plants of the large-sized processing plants are operating, in Araraquara and Matão. However, while one of them is still receiving fruits in the spot market, remaining from 2018/19, at 18 BRL per 40.8-kilo box, harvested and delivered at processing plants, the other is only receiving the oranges previously purchased, at more advanced maturation stages. Concerning the prices for the next season, remuneration in the spot market has not been defined yet.