The trading pace in the market of in natura orange was slow in Brazil in the first fortnight of October. Besides the lack of high quality fruits, rains in São Paulo State limited harvesting activities and lowered the available supply even more. Demand, in turn, was low too, mainly due to the Brazilian holiday on October 12, when liquidity usually decreases.

Purchasers reduced pear orange acquisitions, opting for lower priced varieties, such as valencia. From October 1 to 15, pear orange quotes averaged 32.90 BRL per 40.8-kilo box, on tree, 6.8 % up compared to that in the same period of September. Valencia oranges, however, were traded at 28.89 BRL per box, 8.9 % up in the same comparison.

Regarding tahiti lime, rainy weather hampered fieldwork and prices rose in the first fortnight of October. From Sept. 30 to Oct. 15, tahiti lime quotes averaged 81.98 BRL per 27-kilo box, harvested, 21.6 % up in the same comparison. Precipitation, on the other hand, should favor fruit growth on tree, based on the estimates for a slight supply increase this month.

2019/20 SEASON – The first purchase offers for the oranges from the 2019/20 crop have started to be reported in the market of São Paulo State. On an ad hoc basis, large-sized processors have bid prices around 22 BRL per 40.8-kilo box, harvested and delivered at processors, with the possibility of a bonus in the sales price of orange juice in the international market. Processors bidding prices have been lower than in the spot market this season (at 24 BRL per box for prompt-delivery).

In general, according to agents from processors, farmers are cautious regarding closing trades in advance, since the next season output is still uncertain. Although blossoming was considered positive in most orchards, the weather will be crucial for a good flower settlement – in the same period last year, many fruitlets were lost, reducing production in the 2018/19 season.

Besides, the result of the Presidential Election in Brazil may influence both the exchange rate and, consequently, the price received by processors for orange juice sales in the international market. The farmers consulted by Cepea that have already been contacted by processors, mainly for renegotiation, say they will wait for a better definition in the coming months to decide whether to sell or not their fruits.

Brazilian citrus farmers believe the next orange crop in São Paulo will have positive results, mainly in the orchards located in southern state, where the weather is more favorable (with rains interleaved with sunny days). Farmers are focused on the central area of the state, where intense heat and smaller rain volumes have already caused fruitlets to drop.

Despite the firm sales prices, lower orange production in the 2018/19 crop from the citrus belt (São Paulo and Triângulo Mineiro) should constrain the revenue of farmers who trade with processors, since the lower number of boxes produced per hectare tends to push up the unit price. Only in southwestern SP, where production has not changed much, revenue may remain at high levels.

According to data released by Fundecitrus (Citrus Defense Fund) on September 10, this crop should be 31.4 % smaller than the previous (2017/18), totaling only 273.3 million boxes (40.8 kilos) of oranges. This volume is 5.2 % lower than that first forecast by Fundecitrus in May.

Lower production estimates confirm the initial expectations of the agents consulted by Cepea, who believe that the performance of the current crop may have been compromised by both the high rate of flower loss from the first blossoming (between August and October/17) and the lack of rains in the first semester of 2018. Fundecitrus has reported that the average weight of all varieties is lower than that forecast in May, because of the severe drought (May – July).

Lower domestic supply, in turn, has boosted orange prices to processors this year. Besides, inventories from the 2018/19 crop should again decrease to critical levels by June 2019, according to forecasts from CitrusBR (Brazilian Association of Citrus Exporters), totaling only 146.7 thousand tons of juice, the second lowest in the CitrusBR series, which started in 1988/89, and only enough for two months of exportations.

After the new estimates were released, prices have been stable in the spot market, at 24 BRL per 40.8-kilo box, harvested and delivered at the processor. However, quotes had already increased last month, when CitrusBR anticipated that estimates from Fundecitrus could be revised down. Despite the smaller amount available for crushing, the average yield is forecast to be higher than in the previous crop, due to the dry period in the citrus belt from May to July (CitrusBR).

Most farmers have already closed deals with the industry – since November/17, processors’ bidding prices have been up to 22 BRL per box. Thus, if quotes increase at processors from now onward, the few farmers with fruits available will still be favored.

SHORTER HARVEST – The new report from Fundecitrus has highlighted that the 2018/19 crop harvesting may end earlier, which, in turn, may push up orange quotes in early 2019, when supply is usually low. So far, 36 % of the oranges from that crop have been harvested, 2 percentage points above the same period last season.

IN NATURA MARKET – The low supply of fruits with the quality demanded by the in natura segment underpinned orange prices in the first fortnight of September. Thus, from September 3 to 14, pear orange quotes averaged 30.81 BRL per 40.8-kilo box, on tree, 10.6 % up compared to that in the first fortnight of August.

In the market of tahiti lime, supply is low, which increased quotes in the first fortnight of September – in the first week of the month, prices surpassed 90 BRL per 27-kilo box. Between September 3 and 14, tahiti lime quotes averaged 67.42 BRL per 27-kilo box, harvested, a staggering 83 % up compared to that in the same period last month.

On the other hand, higher quotes have constrained exportations, due to the competition with the fruits from Mexico. According to Fresh Plaza website, tahiti lime shipments to Europe usually step up starting June, both from Brazil and Mexico.

In general, the exportation season for tahiti lime was positive in the first semester, but shipments decreased in both July and August, according to Secex, by 21.5 % and 8.2 %, respectively, compared to the same months of 2017. From January to August this year, exports totaled 76 thousand tons, a slight 0.4 % down compared to the same period last year.

The 2018-2019 orange crop forecast update for São Paulo and West-Southwest Minas Gerais citrus belt, published on September 10, 2018 by Fundecitrus – performed in cooperation with Markestrat, FEA-RP/USP and FCAV/Unesp2 – is of 273.34 million boxes of 40.8 kg each. This figure corresponds to a decrease of 5.19 % in relation to the estimate published in May/2018. Approximately 15.37 million boxes of the total crop should be produced in the Triângulo Mineiro.

Fruit of all varieties harvested up to August presented average weight below the May/2018 forecast. Smaller fruit resulted from a more severe drought than expected for May to July at the time of the estimate. Rainfall in that period is directly related to fruit development and consequently to final fruit weight at harvest. Climatological expectations at that time pointed to a less rainy year, with an accumulated average rainfall for those months of approximately 101 millimeters for the citrus belt, which is 24 % below historical average (1981-2010). However, the actual accumulated rainfall volume for that period was 36 millimeters, 73 % below historical average, characterizing the worst drought in the ten assessed years. More significant rain above historical average only fell in August in the South, Southwest and most of Central regions, with an average of 103 millimeters, whereas for the remainder of the citrus belt the average rainfall for that month was 38 millimeters.

Harvest reached 93 % completion for the early Hamlin, Westin and Rubi varieties, and 75 % for other earlies. Harvest totaled 29 % for the Pera variety, 15 % for the Valencia and Valencia Folha Murcha varieties, and 10 % for the Natal variety. Approximately 36 % of the total 2018-2019 crop was harvested. At the same time last crop season, harvest was 34 % complete. The main difference between the two crop seasons is that the current harvest progressed faster to late varieties. That indicates the crop season will finish earlier. Although the harvest of the Pera and late varieties is still in early stages, it is already necessary to adjust fruit size due to the water deficit that affected full development …

Please download the full update.

Harvesting of the late oranges from the 2018/19 crop, which started in the first fortnight of August, should step up in September. Thus, with higher supply of other varieties, the farmers consulted by Cepea believe pear orange quotes (which have been higher than in 2017 since May/18, despite the crop peak) will not oscillate as much next month.

In light of the low pear orange supply this year, due to the weather, processors started to purchase late oranges (mainly valência) last month – only the fruits in the ideal maturation stage demanded by this segment were purchased. Therefore, the delivery of these varieties is expected to step up in the second fortnight of September, with a higher share of natal oranges.

In general, citrus farmers consider good the quality of the late oranges in irrigated orchards, since they can still grow until the harvesting steps up. However, on the farms with no irrigation, the drought has already affected production – either by staining the peel or by preventing the fruits from growing up.

PEAR – As for pear oranges, whose prices are over 34 BRL per box, on tree (for higher quality fruits), quotes are expected to increase even more until the end of the crop, since many farmers have reported low supply of that variety. In September, however, higher availability of late oranges should constrain significant price rises (since processors will still be selective regarding valência and natal purchases, until they reach the ideal standard for harvesting).

In August, pear orange quotes averaged 29.08 BRL per 40.8-kilo box in the in natura market, a staggering 77 % up compared to the same period of August/17, in nominal terms. The boost came from low supply in São Paulo State in 2018/19, large purchases from processors from SP and the volumes already sold through mid and long-term contracts. Thus, if competition between processors increases, prices in the field may rise even more in the coming months. Pear orange productivity should have the sharpest decrease compared to 2017/18, at 31.2 %.

TAHITI LIME – Tahiti lime quotes also increased in August. According to Cepea collaborators, many farmers interrupted harvesting, aiming to push up prices again – once the variety, still green, may stay longer on trees. Besides, international demand increased in that period too. Thus, between August 1 and 31, tahiti lime quotes averaged 35.75 BRL per 27-kilo box, harvested, 21.4 % up compared to that between July 2 and 31.

Tahiti lime supply is expected to continue low next month, which may boost prices. In the off-season period (from September to October), many of the fruits still on tree will not have reached the ideal size and color to be harvested. Farmers believe tahiti lime volumes will increase only in November – if it rains during these months and if the volume is enough to favor fruits development on tree.

Ardagh Group announced the opening of its new can ends facility in Manaus, Brazil. The new facility houses state-of-the-art production and inspection equipment with capacity to produce 12 million ends per day.

“This significant investment in Manaus strengthens Ardagh Group’s position in the Brazilian market place, and complements our beverage can production facilities in Jacarei and Alagoinhas” said Augusto Seoane, Operations Director Ardagh Metal Beverage Brazil. “The new facility allows us to support both existing and new customer requirements.”

Employing a team of more than 80 people, the new facility consolidates the company’s position as a leading producer of beverage cans and ends in Brazil, serving a growing customer base. Universally recognised for its protective qualities, versatility and environmental credentials, metal is a permanent material meaning it can be infinitely recycled without loss of quality.

Ponkan tangerine season is near the end in São Paulo State. According to agents consulted by Cepea, only a few crops still have some volume to be harvested in early July. In most of the regions, production has already ended. Now, the in natura market from SP has been supplied by other states, mainly Minas Gerais (MG).

According to Cepea collaborators, the crop period (mature fruits) should last for two or three more weeks in that state. However, the fruits from the second flowering event have not been harvested yet. Thus, farmers estimate production to continue until September.

As for quality, agents have reported that fruit growth in MG was hampered by the weather, since it has not rained significantly in that region since April. Thus, ponkan tangerine from that state are mid-sized.

SP – As expected by agents, the harvested volume of ponkan tangerine in São Paulo State is smaller this year. While in 2017 supply lasted for seven months, this year, availability is already low – June is the fourth production month and the crop peak occurred between April and May.

However, the available volume decreased in late May, since some farmers from SP reported fruit losses during truckers’ strike, due to the long period on trucks and higher sensibility of that variety (which was already more mature than oranges).

Prices for ponkan tangerine in 2018 are above the monthly averages last year (from March to June). Lower supply this year, in turn, is linked to unfavorable weather during the development of the fruits, in the second semester of 2017, and the lower vigor of plants, after a large crop last year.

In general, production was low in the last years, with well-distributed crops, no crop peak and not lasting longer than four months. The 2017 season was atypical, due to the different development stages of the fruits at groves, which allowed the harvesting to last longer than in previous years.

In June, supply decreased and prices rose in São Paulo. According to Cepea collaborators, the demand for ponkan was firm in that period – higher than for other citrus varieties. Thus, from June 1 to 20, quotes for ponkan tangerine averaged 36.80 BRL per 27-kilo box, on tree, 10% up compared to that in May (2 – 30).

ORANGE – In June, orange prices were underpinned by low supply of fruits at the ripening stage required by the in natura market. Moreover, the industrial demand is already stepping up, reducing supply in the spot market from São Paulo.

The smaller crop forecast for the Brazilian citrus belt in 2018/19 (São Paulo and Triângulo Mineiro), at 288.29 million 40.8-kilo boxes (almost 30 % lower than the 2017/18 season), should result in critical inventories at processors from São Paulo State on June 30 2019. In 2017//18, despite the larger crop, supply was not significant, only enough to slightly increase the low inventories from 2016/17.

Thus, by June 2019, inventories should be 50 % smaller, considering forecasts for the 2018/19 crop. Data released by CitrusBR (Brazilian Association of Citrus Exporters) on May 22 estimated ending stocks of Frozen Concentrate Orange Juice (FCOJ) Equivalent from 55.9 thousand tons to 154.7 thousand tons in June 2019. CitrusBR forecasts were based on the volumes crushed in the 2017/18 season, at around 243.4 million 40.8-kilo boxes, 34 % down compared to the 370 million boxes crushed in the current season (2017/18).

Cepea calculations, however, indicate inventories are more likely to be from 55.9 and 102.6 thousand tons, not reaching the maximum level estimated by CitrusBR (at 154.7 thousand tons). To forecast that scenario, CitrusBR considered exportations will keep firm. Now, if processors do not aim to reduce inventories that much, the volume shipped may decrease in 2018/19.

The 2017/18 ending stocks of orange juice should be at 305.9 thousand tons by June 30 2018, 20.3 % up compared to that forecast in February/18. The positive 2017/18 harvesting ensured comfortable inventories to processors this year.

In general, the global demand for orange juice has been firm, mainly from the United States, Considering Florida crop may be 35 % lower, according to the USDA, juice availability should continue low in the next season (2019/20).

Regarding growers’ revenue, forecasts for the short-term indicate prices may not change much. Most farmers have already closed contracts with processors, and even if bidding prices rise from now onward, only a few growers would have fruits available for trading. Besides, productivity should be low, since the number of boxes produced per hectare results in a higher cost per unit and lower margins.

BRAZILIAN MARKET – Orange sales were slow in the in natura market in May, due to both colder weather in São Paulo and truckers’ strike, which halted transportation. With the protests, which started on May 21, part of the fruits harvested stayed on trucks.
In that scenario, growers preferred to interrupt harvesting late in the month, aiming to avoid losses. In May (2 – 30), pear orange quotes averaged 26.33 BRL per 40.8-kilo box, on tree, 11.7 % down compared to that in April (2 – 30).

TAHITI LIME – The strike has affected the domestic and international markets of tahiti lime as well. According to Cepea collaborators, purchasers were concerned about acquiring fruits and not receiving them, while growers feared to be affected by flow difficulties. Farmers consulted by Cepea affirmed that the fruits that are still on tree should not be damaged by the harvesting interruption.

In May (2 – 30), tahiti lime quotes averaged 45.13 BRL per 27-kilo box, harvested, 142.5 % up compared to that in April (2 – 30).

On Wednesday, May 9, Fundecitrus (Citrus Defense Fund) released new estimates for the 2018/19 season, reducing production in the citrus belt (São Paulo State and Triângulo Mineiro) by 27.6 % compared to that in the previous crop. According to the report, harvesting in that region should total only 288.29 million orange boxes (40.8-kilo) in 18/19, 11 % down compared to the historical average of the sector.

Lower estimates from Fundecitrus have confirmed Cepea forecasts for a smaller output in 2018/19, due to the damages and losses observed in the main flowering event (from August to October last year), mainly for pear oranges. That scenario was linked to the dry weather and high temperatures during the settlement of the flowers that would become the oranges from the new season. Still, the first estimates indicated losses around 20 %, which could result in a higher production than that forecast.

Ending stocks for orange juice should be 22 % larger on June 30, 2018 (at 254.2 thousand tons), according to CitrusBR (Brazilian Association of Citrus Exporters), but that is still the fourth lowest volume in the last 20 years. Thus, the citrus belt would have to harvest, once again, high amounts, in order to ensure comfortable inventories at processors. The demand for orange juice has been firm, mainly from the United States, making the global supply and demand scenario even more difficult.

However, in the short-term, growers’ revenue may not increase significantly, since most of them have already closed anticipated trades with processors – trades have been closed since November last year. Thus, only a few growers still have fruits available for trading.

Currently, only one of the large-sized processors has been purchasing fruits in the spot market. Before the new estimates were released, quotes for all varieties were at 15 BRL per 40.8-kilo, harvested and delivered at the processor. However, prices may increase as the crop nears and more processors enter the market.

In the mid-term, on the other hand, forecasts for the next season (2019/20) are more positive, considering juice inventories may be empty by June 2019. Besides, with the smaller output in Florida, international demand for the commodity should continue firm during the season. There are concerns with the weather in the coming months as well, which may lower the volume forecast even more.

BRAZILIAN MARKET – Orange sales increased in the in natura market in early May. According to growers, the beginning of the month, when workers’ wages are paid, may have favored demand. However, the average price for that variety in the first fortnight of the month was 19 % lower than in the first fortnight of April. That scenario is linked to higher supply in São Paulo, as well as the slow crushing pace at processors, which led orange sales exclusively to the in natura market (these fruits would be allocated to processors for crushing). Between May 2 and 15, pear orange quotes averaged 25.81 BRL per 40.8-kilo box, on tree, 19 % down compared to that in the first fortnight of April (2 – 13).

Tahiti lime quotes, however, continued at high levels in that period, both in the domestic market and for exportation. According to growers, the fruits still on tree have a good quality, but have not reached the ideal size to be harvested yet – due to the lack of rains in São Paulo. Thus, tahiti lime quotes averaged 49.17 BRL per 27-kilo box, harvested, between May 2 and 15, a staggering 174.2 % up compared to the price average in the first fortnight of April.

The 2018/2019 orange crop forecast published on May 09, 2018 by Fundecitrus, in cooperation with Markestrat, FEA-RP/USP and FCAV/Unesp1 is of 288.29 million boxes of 40.8 kg each. This total includes:

• 55.81 million boxes of the Hamlin, Westin and Rubi varieties;
• 16.55 million boxes of the Valencia Americana, Seleta and Pineapple varieties;
• 81.16 million boxes of the Pera Rio variety;
• 99.80 million boxes of the Valencia and Valencia Folha Murcha varieties;
• 34.97 million boxes of the Natal variety.

1. Bearing trees

Bearing trees of the varieties which make up this estimate total 175.27 million. Information about bearing trees was obtained from the Tree Inventory for São Paulo and west-southwest of Minas Gerais citrus belt: March 2018 status, defined by the new mapping of groves performed from September 08, 2017 to January 29, 2018 and by counting of trees present in 5% of plots mapped, from January 29 to March 07, 2018

The georeferenced mapping, carried out for the first time at the 2015 Inventory, has been through a complete update for this 2018 Inventory. New high definition orthorectified images were obtained by the satellites SPOT 6&7 from European Airbus Defence and Space between May and August, 2017. In September, 2017 images were made available to survey agents, together with drawings of plots identified in the previous mapping, which were superimposed to the images for easier visualization of areas that should be visited to collect in loco data. Scanning or visual inspection of images were also employed by survey agents before they went to the field to pre-identify citrus groves planted after the previous mapping from 2015 to 2017, which should also be visited.

No information relative to the plot other than their outlines was supplied to survey agents, which required all new data to be collected on: variety, year set, spacing, visual aspect of plants and irrigation system, when present2. Recently collected data relative to the variety and year set that differed from the previous register were audited for validation. Outlines of plots were redrawn to correspond to their present area, whenever their area was changed after plots having been registered in the previous mapping. Field visits identified plots that were abandoned or eradicated after the 2015 Inventory, and those identified in that mapping as being in a similar situation, so that they were also revisited for updating data. A new feature in the current mapping is the delimitation of farms, which more precisely quantifies farms present in the citrus belt…

Please download the complete forecast under: www.fundecitrus.com.br/pdf

Opposite to the expected by agents, tahiti lime supply has been controlled in São Paulo State, and quotes, underpinned at higher levels. The price average in April/18, at 18.61 BRL per 27-kilo box (harvested) was the second highest for the month, in nominal terms, in all Cepea series, which started in 1996 for this product – compared to March/18, that price average is 34.2 % higher.

Previously, agents expected the harvesting of the fruits from the second flowering event to increase tahiti lime availability in the in natura market in April. However, low rain volumes in the citrus belt in the first two months of the year delayed fruits development, extending their period on tree.

Purchasers have claimed difficulty to find good quality tahiti lime in the in natura market. While the amount of mature fruits is low, the new ones are still green, postponing the harvesting. In that scenario, agents fear the volume of tahiti lime may increase too much in May, which could press down quotes – purposeful harvesting delays may press down quotes as well.

As for the industrial segment, bidding prices in the spot market were around 15 BRL per 40.8-kilo box, harvested and delivered at the processor, in April, with only one plant (smaller-sized) receiving that variety.

In the international market, tahiti lime exportations have reached new records in the crop, totaling 32.25 thousand tons from January to March/18, according to Secex. Compared to the same period of the previous season, current shipments are 2.5 % higher.

For the coming weeks, however, competition with Mexico shipments is expected to increase, since supply is reduced in Brazil, but growing in Mexico. According to Fresh Plaza, the weather in Mexico has been favorable to tahiti lime production, and Mexican fruits have reached the ideal color and maturation for trading in that segment.

ORANGE – The first pear oranges from the 2018/19 crop are already available in the in natura market of São Paulo State. According to Cepea collaborators, with low supply and firm prices for this variety, harvesting has been anticipated. The higher availability of green fruits, however, has widened the price gap between the large-sized pear oranges and the small-sized ones.

As for the larger-sized fruits, prices have reached 35 BRL per 40.8-kilo box, on tree, while the small-sized fruits from the new season have been traded between 25 BRL and 28 BRL per box. Thus, in April, pear orange quotes averaged 29.83 BRL per 40.8-kilo box, 2.8 % up compared to that in March.

According to agents, the fruits available in the in natura segment have not reached the ideal maturation yet, due to the weather in the first two months of 2018, which delayed the development of some oranges from the 2018/19 season, mainly those from the second flowering event, which, in turn, opened between October and December/17. The slow maturation of these fruits is linked to the high temperatures in early 2018 and the smaller rain amount in the main citrus producing regions from SP, according to Inmet (National Institute of Meteorology in Brazil).

The larger rain volume in March, on the other hand, offset the development delay of the oranges on tree. Still, growers expect the fruits to be ready only from the second fortnight of May onward.

The BIOFACH AMERICA LATINA – BIO BRAZIL FAIR will open ist doors again from 6 to 9 June 2018. This 14th edition of Brazil’s most important organic products exhibition will be held at the Anhembi Exhibition Grounds in São Paulo for the first time. Visitors and exhibitors are expected from around the world, including from Peru, South Korea, the United States, Chile, China and Italy. This exhibition, to be held concurrently with the Naturaltech Exhibition, is the central point of contact for Latin America’s organic products industry. In addition to the new venue, the exhibition will feature organised business meetings and an international forum.

Fuelled by rising consumer demand, the consumption of organic foods is rising steadily in Brazil. Sales of organic foods in this country have since grown to more than R$ 3 billion, or US$ 900 million. This development will certainly be reflected at the BIOFACH AMERICA LATINA – BIO BRAZIL FAIR 2018, which will be held at the Anhembi Exhibition Grounds in São Paulo. This venue offers plenty of space for all exhibitors and visitors to Latin America’s largest international exhibition for organic products and ecological agriculture to discover the latest trends and exciting new developments in the organic products industry. Moreover, the excellent infrastructure of Anhembi Park, which is one of Latin America’s most important event centres, has been attested to by exhibitors and visitors for many years. This offshoot of BIOFACH Nürnberg is thus an excellent meeting place to establish or deepen business relationships with Brazil’s most important decision makers and associations in the organic products industry, as well as international organic product companies.

Knowledge platform and networking expertise

In addition to the product show, the exhibition will serve as a central knowledge platform thanks to the “International Forum of Organic and Sustainable Production”, where numerous presentations and panels will deliver concentrated expertise in organic products over a total of more than 100 hours. In addition, the so-called “Area Conhecimento” and “Area Inspiração” featuring selected discussions and contents will provide inspirational ideas for Latin America’s burgeoning organic products sector.

Concurrently, The BIOFACH AMERICA LATINA – BIO BRAZIL FAIR will also create ideal conditions for establishing business contacts in an exclusive setting of organized business meetings between vendors, buyers and retailers of organic products.

Experience the full range of organic diversity

Thanks to the numerous product segments on display, visitors to the BIOFACH AMERICA LATINA – BIO BRAZIL FAIR will experience the full range of organic diversity. The offering ranges from foods to cosmetics and clothing. Besides trade visitors, the exhibition is also aimed at interested consumers of organic products, so as to bind them closer to the industry and demonstrate the advantages of a sustainable lifestyle. For this reason, the exhibition is open to the general public on all days, thereby bridging the divide between direct consumer outreach and contact cultivation as an exclusive business platform.

The crushing pace of the 2017/18 oranges has been slow at processors from São Paulo State. Currently, only one plant of the large-sized processors is operating (in Araraquara), receiving early oranges, both purchased through contract and in the spot market, where bidding prices for pear and late oranges have been around 15 BRL per 40.8-kilo box, harvested and delivered at the processor. At small-sized processors, however, mainly those that produce fresh juice, quotes may reach 23 BRL per 40.8-kilo box, depending on yield and quality.

Crushing of the 2018/19 early oranges, in turn, should start only in May – activities are forecast to step up in June. Remuneration in the spot has not been defined yet, but prices bid by processors are expected to be similar or even higher than in the 2017/18 crop (at 18 BRL per box), since orange supply is expected to be smaller this year, and juice inventories, limited.

2017/18 SEASON – On April 10, Fundecitrus (Citrus Defense Fund) announced that orange production in the citrus belt (São Paulo and Triângulo Mineiro) ended with 398.35 million boxes of 40.8 kilos, a staggering 62.4 % up compared to that harvested in the 2016/17 crop (245.3 million boxes). Compared to the average in the last 10 years, the current production is 25 % higher and the largest since 2011/2012, when it totaled 416 million boxes. According to Fundecitrus, good rain volumes in the developing period and higher investments in crop management favored productivity.

DOMESTIC MARKET – With the slower crushing pace, early oranges were sold exclusively to the in natura market in the first fortnight of April. Between April 2 and 13, pear orange prices averaged 31.88 BRL per 40.8-kilo box, on tree, 17.6 % up compared to the average in the first fortnight of March.

As for tahiti lime, the market was calmer in the first half of April. However, with the price rises observed in late March, growers continued to control the harvesting pace, aiming to underpin quotes. In that scenario, tahiti lime prices averaged 17.93 BRL per 27-kilo box, harvested, 31.1 % up compared to that in the first fortnight of March.

Orange production final¹ estimate totals 398.35 million boxes

The 2017-2018 orange production final estimate for the São Paulo and West-Southwest of Minas Gerais Citrus Belt, published on April 10, 2018 by Fundecitrus – Fund for Citrus Protection, carried out in cooperation with Markestrat, FEA- RP/USP and FCAV/Unesp² – is of 398.35 million boxes of 40.8 kg each, 62 % higher in comparison to that of the previous crop (2016-2017) with a final figure of 245.31 million boxes, and 25 % above the average of the seasons of the last ten years3. All crop estimate updates published along the season showed positive change as compared to the previous expectation. The final figure represents an increase of 0.27 % in relation to the update published in February 2018 and 9.30 % in relation to the initial May 2017 forecast.

The closing figure for total production includes:

• 77.48 million boxes of the Hamlin, Westin and Rubi varieties;
• 18.02 million boxes of the Valencia Americana, Valencia Argentina, Seleta and Pineapple varieties;
• 118.47 million boxes of the Pera Rio variety;
• 139.62 million boxes of the Valencia and Valencia Folha Murcha varieties;
• 44.76 million boxes of the Natal variety.

Approximately 30.51 million boxes of the final estimated crop were produced in the West of Minas Gerais.

Regarding the productivity index, the crop 2017-2018 showed a remarkable performance: 1,033 boxes were harvested per hectare, against 634 boxes per hectare in 2016-2017. The significant variation between the two crops was triggered by a favorable conjunction of factors. Suitable weather for citrus growing and improved cultural practices in groves in 2016, evidenced by the increased demand of inputs for crop nutritional and phytosanitary management, influenced positive results…

¹ Hamlin, Westin, Rubi, Valencia Americana, Valencia Argentina, Seleta, Pineapple Pera Rio, Valencia, Valencia Folha Murcha and Natal.
² Department of math and science.

Please download the complete forecast under: https://bit.ly/2JGhOMT

New estimates for the 2017/18 orange production in the citrus belt (São Paulo and Triângulo Mineiro) may affect ending stocks of the season, on June 30, 2018. Data released by CitrusBR (Brazilian Association of Citrus Exporters) indicate that the larger orange harvest may more than double the juice volume held by processing companies in São Paulo, compared to the same period last season.

The Association says that the season may finish with juice inventories at 254.2 thousand tons (equivalent to concentrate juice), which represents 12 weeks of consumption. This figure is 22 % higher than that estimated in August 2017; however, it is still the fourth lowest over the last 20 years.

Although still uncertain, initial expectations indicate that the 2018/19 orange production will be smaller than in the current season, except in southwestern São Paulo (Avaré and surroundings), where the weather may allow production similar to that in 2017/18. Therefore, there is nothing indicating orange juice surplus, also based on the good performance of exportations.

The recovery of inventories compared to the CitrusBR projection released in August was already expected by the sector, given that estimates for the orange crop, performed by Fundecitrus (Citrus Defense Fund), has already been reviewed upwards three times since the first release of CitrusBR. In the first estimate (May/17), Fundecitrus forecast 364.5 million 40.8-kilo boxes in São Paulo and Triângulo Mineiro; however, due to favorable weather conditions during the season and better cultural practices, that estimate was revised up to 397.27 million boxes on the projection released on February, 15.

The good rainfall, on the other hand, may affect industrial revenue (number of necessary orange boxes to produce one ton of concentrate juice). CitrusBR data indicate that, on the average of the season, 282.49 orange boxes may be necessary for each juice ton, 5.7 % more compared to the previous estimate (August).

2017/18 CROP – According to Fundecitrus data released on February 15, the citrus belt (São Paulo and Triângulo Mineiro) may produce 397.27 million 40.8-kilo boxes of oranges in the 2017/18 season, 62 % more than in the 2016/17 season (245.3 million boxes) and 3.13 % higher in relation to December forecasts. Fundecitrus says that, considering all varieties, 97 % of the total of the crop has already been harvested.

The survey conducted by independent auditing firms with each of CitrusBR associate member companies and consolidated by external auditing ascertained that global inventories of Brazilian orange juice, converted into Frozen Concentrated Orange Juice Equivalent (FCOJ  66° Brix)  at CitrusBR associate members’ facilities on December 31, 2017, amounted to 702,981 tons.

This volume indicates an increase of 205,598 tons or 41.3% when compared to the 497,383 tons existing 12 months before on December 31, 2016. The same survey indicates that on June 30th, 2018, the global inventories of Brazilian Orange Juice are anticipated to be 254.2 thousand tons of FCOJ Equivalent 66° Brix.

This projection, if confirmed, will represent an increase of 146,813 tons as compared to the 107,387 tons which were existing at all CitrusBR members’ facilities on June 30th, 2017, as previously informed to the market. …

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Orange growers from São Paulo expect the rains observed in the state in January to favor a new blossoming in the upcoming weeks, as trees of some orchards were budding. In mid-January, growers from eastern SP already observed new blossoming, which may originate the 2018/19 pear oranges out of the desirable period. Moreover, in the current developmental stage of the plants, rains also favor the settling of second or third blossoming, observed in some orchards in São Paulo between October and December.

On the other hand, humidity concerns citrus growers regarding diseases, such as “estrelinha” (blossom-end-rot), which may hit open flowers. Therefore, producers adopted preventive measures to avoid new losses. Besides high moisture, another aspect that may limit the 2018/19 crop volume is the larger production in the current season (2017/18), which reduced the plant vigor last year. The 2017/18 season is almost 57 % higher than the previous one.

PRICES – The availability of high quality oranges was limited in São Paulo State in January, increasing the supply of low quality fruits and pressing down quotes. Moreover, rains lowered the demand for citrus fruits in that period. In January, pear orange quotes averaged 20.00 BRL per 40.8-kilo box, on tree, 46.7 % lower than in January/17, but still 0.3 % higher than in December/17. As for tahiti lime, high supply and the weak pace of trades (domestic and international) pressed down values last month. On the other hand, demand was heated, due to the big size of the fruits and the intensification of crushing. In January, tahiti lime quotes averaged 20.50 BRL per 27-kilo box, harvested, 50.1 % down compared to that in December/17.

After the large output in 2017/18, supply may be limited again in the 2018/19 season in São Paulo State and Triângulo Mineiro. With unfavorable weather during the fruitlet settlement in the first flowering event (the main event), which would become fruits in the next season, losses were observed in three of the four main citrus producing regions in São Paulo.

Northern and central SP should be the most affected, followed by the eastern region of the state. In southwestern SP, however, fruitlet drops in the first flowering event were within normality. Thus, once again, productivity in this area may be high again.
With signs of new flowering events at the end of the year, losses may be softened if settlement is satisfactory. Still, the volume of fruits should be smaller than that from the main event.

The first USDA report for the next Brazilian orange crop, released in December, indicate an output of 320 million boxes of 40.8 kilos in 2018/19 in São Paulo State and Triângulo Mineiro, 19 % lower than in 2017/18. Although it is still early to measure, growers consulted by Cepea believe in an even lower output. The first estimates from Fundecitrus (Citrus Defense Fund), in turn, should be released in May.

Despite forecasts for lower supply of raw material in 2018/19, 93 % recovery of orange juice inventories at processors from São Paulo in June 2018 does not indicate excess in juice supply yet. The large crop will be enough only to replenish low inventories from 2016/17.

Besides, agents should be watchful for lower production in Florida as well. According to the last report released by the USDA (in December), harvesting in Florida should total only 46 million boxes, 33 % down compared to the previous season. In addition to greening, which has affected local production for some crops, hurricane Irma hit the area in September 2017. Local production results will be released in July 2018. Thus, as inventories decrease in the United States, there is need for more importation.

PURCHASES – The first orange purchase proposals in the 2018/19 season were reported in the market of São Paulo in mid-November, 2017. Although occasional, large-sized processors have signaled possible trades around 20.00 BRL per 40.8-kilo box, harvested and delivered at the processor, with participation additional in juice sales prices in the international market. If a larger volume is purchased – or for a period longer than two years –, bids at 22.00 BRL per box have been reported.

However, based on expectations for a smaller crop, citrus growers are cautious regarding closing new contracts, and many of them are monitoring price rises. The values initially bid by the industry are higher than in the spot market this crop, but lower than in the 2016/17 season, when supply was low.

TAHITI LIME – Tahiti lime harvest in 2018 is forecast to be smaller as well. According to Cepea collaborators, besides losses of part of the flowers (due to warm and dry weather), many small-sized fruits were harvested in November and December, which should be ready to be harvested now in January.

The tahiti lime crop peak is forecast for January, since rains in late December and early January may have favored the development and growth of fruits. Thus, prices are expected to remain at low levels until late March, pressed down by higher supply. On the other hand, exportations are expected to increase, as well as the volume of fruits sent to processors.

Total orange¹ crop forecast update is 385.20 million of boxes

The orange production forecast update of the São Paulo and West-Southwest of Minas Gerais citrus belt for the 2017-2018 season, published on December 11th, 2017 by Fundecitrus with the cooperation of Markestrat, FEA-RP/USP and FCAV/Unesp2 – is 385.20 million boxes, weighing 40.8 kg each. This figure corresponds to an increase of 2.98 % compared to the update published in September/2017 and an increase of 5.69 % in relation to the initial May/2017 forecast. Out of the total crop, about 29.43 million boxes are estimated for the Triângulo Mineiro region.

The data collected as of the publication of this forecast update show that the fruits harvested from all varieties in this season have an average weight above that of the initial forecasts. The forecast in May 2017 was that each fruit would weigh by harvest time an average of 154 grams; however, in September 2017, the unit weight rose to 158 grams and now is at 162 grams. The weight gain was the main reason which caused increased production in early varieties in September 2017 and continues to be the determining factor for the increase in mid-season and late varieties of this update. The fruit droppage rate is confirming to be high vis-à-vis the crop standards in the citrus belt, in line with the initial forecast, since the variation since May 2017 did not decrease even by half percent point from the estimated value. The positive result so far was triggered mainly by rainfall above historical levels at the beginning of the season, which again fell at producing regions in October, reaching an average of 147 mm, and 227 mm in November, after the drought which lasted from July to September, with only an accumulated total of 47 mm for the quarter, according to Somar Meteorologia’s weather forecast. In addition to the weather, the good performance of the harvest is related to greater intensity of crop management at the groves, which can be evidenced by the increased demand of inputs used in their nutritional and phytosanitary management as seen in the last year in citrus growing. …

¹ Hamlin, Westin, Rubi, Valencia Americana, Valencia Argentina, Seleta, Pineapple Pera Rio, Valencia, Valencia Folha Murcha and Natal.
² Exact Sciences Department, FCAV/Unesp Jaboticabal.

Please download the complete forecast: www.fundecitrus.com

The first acquisition proposals for oranges from the 2018/19 crop have started to be reported in the market of São Paulo State. Occasionally, large-sized processors have demonstrated interest in trades around 20.00 BRL per 40.8-kilo box, harvested and delivered at the processor.

In general, according to agents from processors, these proposals may indicate the possible price level in the next crop, which should be smaller than the current season, that produced one of the largest volumes in all times. The first prices bid by processors, around 20.00 BRL per box, are higher than those traded in the spot market this season (17.00 BRL per box for prompt-delivery), but lower than those in the 2016/17 crop, when supply was low (averaging 22.02 BRL per box between July and December/16).

Citrus growers are concerned with the next orange crop in São Paulo. Although it is still early to measure the 2018/19 harvesting, some growers estimate the fruitlet drops of the main flowering event, between late August and early September and considered positive, may have reached 50 % (mainly for pera rio, which is more sensitive to the hot and dry weather in the last months).

BRAZILIAN MARKET – The demand for oranges was higher in the first fortnight of November in the domestic market, due to the beginning of the month, when sales usually increase. Besides, with lower supply of pear oranges with quality near that demanded by the segment, quotes of higher quality fruits pushed up the price average. Thus, from November 1 to 14, pear orange prices averaged 19.79 BRL per 40.8-kilo box, on tree, 2.2 % up compared to the average between October 2 and 13.

The volume of tahiti lime, in turn, increased in the in natura market. Besides the fruits that are reaching the size demanded by the segment, some growers were taking advantage of the firm prices to harvest and flow the variety, even before the fruits reach the ideal size and color. Thus, the availability of small-sized tahiti lime (which should be ready only this month) was increasing.

This scenario is hampering tahiti lime exportations as well, since the volume of fruits in the ideal size for shipment is low, and prices are still considered high. Besides, with the nearness of the holiday season, exportations should step up, concerning exporters regarding availability even more. Between November 1 and 14, tahiti lime quotes averaged 60.60 BRL per 27-kilo box, harvested, 25.9 % down compared to that between October 2 and 13.

EXPORTATIONS – In the 2017/18 season (July to October/17), exportations of FCOJ Equivalent continue 25 % higher than in the same period last crop, according to Secex, totaling 419.2 thousand tons. Revenue, in turn, increased 32 %, to 747.6 million USD. In Real, revenue rose 30 % in the same comparison, totaling 2.36 billion BRL. This rise was already expected by agents from the sector, based on the larger Brazilian production and higher demand from the United States.

Tahiti lime exportations, in turn, decreased, due to lower supply in Brazil in the last months. Thus, this crop (Jan. to Oct/17), shipments have totaled 81.4 thousand tons, 2.4 % lower than in the same period last season (Secex).

The Brazilian exportations of Frozen Concentrate Orange Juice (FCOJ) Equivalent have been at higher levels in the 2017/18 season (July to September/17) compared to the same period last crop. This scenario, already expected by agents from the sector, is due to higher Brazilian supply and firmer demand from the United States.

According to Secex, this season, Brazil has shipped 50.4 thousand tons of juice only to the United States, 12 % up compared to the same period last year. Brazilian juice exportations to the United States are expected to remain firm this crop. In the first official estimates regarding the 2017/18 season, released on October 12, the USDA confirmed production should be 21 % lower than in 2016/17, totaling 54 million boxes.

Besides problems with greening this season, citrus production from Florida, the main citrus producing state in the United States, was damaged by Irma hurricane, which hit groves in September, causing fruit drops and floods.

The smaller crop in Florida should lower the global orange juice supply even more. In Brazil, although productivity is almost 53 % higher than in the 2016/17 season, according to Fundecitrus (Citrus Defense Fund), the weather conditions this year may still affect the total volume. With the drought and high temperatures observed in September, many fruits wilted and crystalized at groves. In October, however, rains have dropped fruits of weak varieties, causing losses to growers from São Paulo State.

Besides, despite recovery of inventories in the 2017/18 season, estimated at 207.6 thousand tons, the low supply at Brazilian processors should only be softened. Therefore, Brazil should be aware of that scenario, mainly if production in the 2018/19 season is affected by the current weather.

EXPORTATIONS – From July to September this year, according to Secex, Brazil shipped 305.4 thousand tons of FCOJ Equivalent, 12 % up compared to the same period of 2016. Revenue rose 19 %, totaling 537.5 million USD. In Real, revenue totaled 1.69 billion BRL, 16 % up in the same comparison. For the European Union, sales totaled 200.9 thousand tons of orange juice, 5 % up compared to that in the same period last year. Revenue totaled 349.8 million USD, 11 % up in the same comparison. In Real, it totaled 1.10 billion BRL, 8 % up in the period.

DOMESTIC MARKET – The demand for oranges was low in the domestic market in the first fortnight of October. According to growers consulted by Cepea, the Brazilian Holiday on October 12, as well as the large volumes sold in the first week of the month, which reduced the supply needs from purchasers, may have affected sales. With lower supply of fruits with quality standards demanded by the in natura market, however, prices increased. Between October 1 and 13, pear orange quotes averaged 19.37 BRL per 40.8-kilo box, on tree, 19 % up compared to the first fortnight of September (1 – 15).

TAHITI LIME – Tahiti lime quotes reached 100.00 BRL per 27-kilo box, harvested, in the first fortnight of October, pushed up by the replenishing needs of growers, since harvesting was interrupted by rains, reducing availability in São Paulo State even more. Between October 1 and 13, tahiti lime quotes averaged 81.75 BRL per 27-kilo box, harvested, a staggering 63.5% up against that in the first fortnight of September (1 – 15).

Exportations of tahiti lime from SP State continued limited by high domestic prices, which reduced fruit competitiveness in the international market. Thus, Cepea collaborators believe shipments may intensify again only in November – as local supply should increase.

Strengthens global offering of natural extracts

Givaudan, one the global leaders in flavours and fragrances, announced that it is acquiring the Nutrition Division of Centroflora Group, as part of its 2020 strategy to strengthen its global offering of natural extracts and further develop its presence in Brazil.

Centroflora’s Nutrition Division (Centroflora Nutra) manufactures botanical extracts and dehydrated fruits for the food, beverage and consumer goods sectors. It offers a wide variety of plant extracts from various regions of the world, with a particular focus on those from the great biodiversity of Brazil. With headquarters and a manufacturing facility in Botucatu, Brazil, Centroflora Nutra employs about 116 people and exports products globally.

While terms of the deal have not been disclosed, Centroflora Nutra’s business would have represented approximately CHF 17 million of incremental sales to Givaudan’s results in 2017 on a proforma basis. Givaudan plans to fund the transaction from existing resources and is expected to close early 2018.