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A survey carried out by independent audits firms with each of CitrusBR members, and subsequently consolidated confidentially by an external audit, found that the global inventories of Brazilian orange juice, converted into FCOJ Equivalent, held by CitrusBR members on December 31st, 2023 were 463,940.92 tons. Although representing an increase of 6.7 % in comparison to the 434,943 tonnes from the previous season, this number is the second lowest figure in the historical series. The disclosure of final processing data and industrial yield on fruit will be done by CitrusBR later in 2024.

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2023 was a very positive year for the citrus activity in São Paulo state and in Triângulo Mineiro concerning prices received by citrus farmers. Orange values were at firm levels during the year in both the in natura market and at the industry – in this segment, quotations hit record levels in real terms, allowing a year of good profitability.

This scenario is explained by the lower supply compared to the demand, despite the fact that the 2023/24 production is on average. Orange juice stocks started the season at low levels, and there was the need to purchase the raw material in order to prevent a significant decrease of stocks at the end of the current season. Moreover, the orange juice demand is firm in the international market, especially from the US, country that has been registering limited production for years due to greening (HLB) impacts.

In November, prices of orange to the industry hit real records, considering Cepea historical series, which has started in October 1994 (monthly values were deflated by IGP-DI October/23).

Orange production

The 2023/24 orange season in São Paulo state and in Triângulo Mineiro may decrease 2.2 % compared to the previous, according to Fundecitrus. The total volume is forecast at 307.22 million boxes, 0.7 % smaller in relation to the first estimate, released in May.

The decrease is related to above-average rains, which increased the incidence of blossom-end rot, to the negative biennial cycle (except in the north), the lower volume of flowers verified in some late variety trees and to the intensity of greening.

It is important to mention that this volume is below the need of the industry to meet the international demand and increase juice stocks, which are very low. According to CitrusBR, the volume in stocks hit the lowest level in 12 years, totaling only 84.745 thousand tons of volume equivalent to concentrate juice by the end of the 2022/23 season (June/23), downing 40.7 % compared to the previous crop. These critical numbers arise serious concerns about the global orange juice supply.

A survey carried out through independent auditing of each of the companies associated with CitrusBR and also consolidated by external auditing revealed that the total oranges processed in the Sao Paulo and Minas Gerais Citrus Belt in the 2022/23 season was estimated at 265,292,217 boxes of oranges of 40.8 kg of which 243,967,550 boxes were processed by CitrusBR members and close to 21.3 million boxes were processed by non-members.

With the final estimated juice yield on fruit of 280.58 boxes of oranges to produce one metric ton of FCOJ equivalent in aggregate for CitrusBR members and non-members, the final estimate for total orange juice production for the 2022/23 season was of 945,529 metric tons of FCOJ equivalent …

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The agents in the citrus market have been concerned about two recent events: hurricane Idalia, which hit Florida in late August (the third hurricane that hit the North-American State in less than a year), and the release of orange juice inventories at Brazilian processors, which, according to CitrusBR, are currently at the lowest levels since the beginning of the historical series, 12 years ago.

According to CitrusBR, on June 30th, 2023, when the 2022/23 season ended, the ending stocks of Frozen Concentrate Orange Juice (FCOJ) Equivalent totaled 84.745 thousand tons, 40.7 % lower than that at the end of the previous season and 39.5 % below that estimated by CitrusBR in August last year.

The reasons for these low inventories are the lower number of fruits processed (because of the reduced crop and losses caused by the lack of labor for the harvest), lower yield of oranges (partially due to the harvest delay) and higher juice exports (majorly to the United States) compared to that last season – a reflex of lower production in Florida.

These figures have raised concerns about the world supply of orange juice. The output in the current season (2023/24) is not forecast to be high and may not be enough for a recovery in the volume stocked by Brazilian processors.

So far, CitrusBR has preferred not to estimate the ending stocks for the 23/24 season (in June 2024), due to the challenges related to brix levels, industrial yield and even the volume processed, which may change until the end of the season. However, Cepea calculations based on data from Fundecitrus released in May 2023 show that inventories will hardly be higher by the end of the season, scenario that may become worse if exports rise again and if yield is below the average. In this context, orange production in the Brazilian citrus belt (São Paulo and the Triângulo Mineiro) will have to be high in the coming season (2024/25) for inventories to recover, at least partially, in June 2025.

By the end of the 2020/21 season, in June 2021, the inventories of Frozen Concentrate Orange Juice (FCOJ) equivalent at Brazilian processors totaled 316.93 thousand tons, according to data from CitrusBR (Brazilian Association of Citrus Exporters) released in mid-August. Compared to that at the end of the 2019/20 season, inventories decreased by 33 %. This reduction was already expected by agents, due to the slower crushing pace of oranges in 2020/21, when orange production was low.

CitrusBR avoided releasing estimates for the current season because of the weather issues (extended drought in the citrus belt and frosts in late July) in the major citrus-producing regions in Brazil, which are still concerning agents. However, ending stocks in the 2021/22 season (by June 2022) may be lower than the strategic level.

So far, considering Fundecitrus’ (Citrus Defense Fund) production estimates from May, of 294 million boxes (40.8 kilograms each), the volume processed may be around 250 million boxes. In that scenario, Cepea data indicate that ending stocks in the 2021/22 season (which ends in June/22) may not be enough to generate a world surplus of orange juice.

Also, agents in the Brazilian citrus sector believe that the estimates from Fundecitrus will be revised down, due to the drought and frosts in Brazil. In this context, the volume processed may be revised too, and juice inventories may be even lower. Thus, processors will depend on higher orange production in 2022/23 to, at least, replenish inventories – which is a concern too, considering that the effects of the weather may be extended to the coming season, since many trees are currently debilitated.

As regards orange processing, the crushing pace for the fruits from 2021/22 was fast in August at the large-sized plants in São Paulo State (SP), with mostly pear oranges being crushed.

Orange processing is expected to last until mid-February/March 2022, with less plants in activity compared to that in the second semester of 2021, however, with higher volumes being produced than that in the same period of previous years, because of the delay in the development of trees (due to weather issues) and irregular flowering. It is worth to consider that the 2021/22 season is expected to have higher volumes of fruits from the third and fourth flowering events (altogether) since Fundecitrus began estimating crops, in 2015/16 – making it a late crop.

BRAZILIAN MARKET IN AUGUST – The demand for oranges was low in the Brazilian market in August, constrained by the current high price levels and lower quality of the oranges available (small-sized and wilted). Still, prices increased, boosted by low supply.

Orange juice inventories ended the 2019-20 season (on June 30, 2020) on the rise, as already expected by agents from the Brazilian citrus market. According to CitrusBR (Brazilian Association of Citrus Exporters), the volume stocked by then totaled 471.138 thousand tons, a staggering 86 % up compared to that in the previous season, due to the higher orange production.

However, although the 2020-21 crop started with high volumes stocked, production is forecast to be low in São Paulo State and the Triângulo Mineiro, which is keeping firm the demand from processors for oranges. This scenario should lower inventories by the end of the current crop.

A report released by Citrus BR in late August estimates that, on June 30 2021, the inventories of Frozen Concentrate Orange Juice (FCOJ) Equivalent from the 20-21 crop will total from 240 to 280 thousand tons, 49 % down compared to that in the previous season.

These estimates consider that around 238 million boxes of 40.8 kilos of oranges will be processed (with 50 million boxes left to be sold in the in natura market), average yield of 268 boxes to produce a ton of FCOJ Equivalent and stable sales, at 1.15 million tons. These results are similar to that estimated by Cepea in May, at 250 thousand tons. It is worth to mention that both estimates (from CitrusBR and Cepea) take into consideration the fact that there may be adjustments in industrial yield, due to the multiple flowerings registered in 2020-21.

According to agents from processors, yield has been low, and much more than the 268 boxes are needed to produce a ton of juice, as estimated by CitrusBR. Although this number tends to decrease along the season, it is concerning, since the prices paid for the fruits have been higher this season, meaning that remuneration for lower quality oranges is currently higher. In this scenario, the only processors that has been purchasing oranges in the Brazilian spot market is bidding prices according to yield: when more than 290 boxes are needed for a ton of juice, prices average 21.60 BRL/box, while for the fruits with higher yield, prices reach 24.00 BRL/box.

BRAZILIAN MARKET IN AUGUST – Despite the weak demand, due to the colder weather, orange prices remained firm in August, underpinned by the lower supply of higher quality fruits in the in natura market. Besides, the fast crushing pace at the large-sized processors in SP helped to reduce availability in the market. Thus, between August 1st and 31, the average price for pear oranges closed at 30.01 BRL per 40.8-kilo box, on tree, 11.8 % higher than that in July.

TAHITI LIME – Tahiti lime supply was low in the Brazilian market in August, forecast to increase only from mid-September. The fruits that were on tree had not reached the ideal size and maturation to be harvested, since the weather was dry in the last months.

Thus, prices were firm last month, which limited deals in the in natura market of São Paulo State. In August, the average price for tahiti lime was 85.15 BRL per 27-kilo box, harvested, 40 % up compared to that in July.

In June 2019, the inventories of Frozen Concentrate Orange Juice (FCOJ) equivalent at Brazilian processing plants closed at 253.18 thousand tons, 26.2 % smaller than that in the 2017/18 season, according to data from CitrusBR (Brazilian Association of Citrus Exporters).

This volume is considered small in light of historic inventories – in recent years, inventories were only lower than that in 2010/11 and in 2016/17. The worse performance of Brazilian juice exports in 2018/19, therefore, prevented juice inventories at Brazilian processing plants from decreasing to critical levels.

CitrusBR should only release data about the ending stocks from 2019/20 and 2020/21 (June/20) next year. However, according to Cepea calculations, inventories should bounce back at the processing plants from São Paulo in 2020/21, due to the large 2019/20 crop in the citrus belt.

Considering initial inventories at 253.18 thousand tons in June/19, the demand in the in natura market, between 50 and 60 million orange boxes (the remaining production is allocated to crushing), and the increase in exports, to around 1.05 million tons, Cepea estimates inventories to be around 400 thousand tons by June/20, much higher than the current levels.

Although this scenario points to high inventories (the last four seasons ended with lower inventories), the effect on orange quotes in 2020/21 will depend on the volume to be produced next season. If production is average or high, the season tends to end with large volumes stocked again, which may constrain remuneration to growers as well as price rises for orange juice.

According to Fundecitrus (Citrus Defense Fund), the annual orange production in the Brazilian citrus belt has been oscillating between  high and low. However, it is still early to forecast the 2020/21 season, since flowering is still beginning in some groves from SP – but, considering the long drought, flowerings may be favored.

With the higher juice supply in 2019/20, shipments may bounce back from 2018/19. The needs of European distributors may favor exports, but higher demand from the United States will still depend on Florida’s production.

BRAZILIAN MARKET – The high price levels for tahiti lime hampered new deals in the in natura market from SP in August. According to agents, supply was low, since, until the end of the month, the fruits still on tree had not reached the ideal size and maturation stage to be harvested.

Drier weather limited fruits growth, which should underpin tahiti lime prices in September. Between August 1 and 31, quotes averaged 30.03 BRL per 27-kilo box, harvested, 20.1 % up compared to that in July.

In the in natura market of pear oranges, the trading pace was slow and demand decreased in August. However, low supply underpinned prices. Thus, pear orange quotes averaged 18.26 BRL per 40.8-kilo box, on tree, in August, 1.1 % up compared to that in July.

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.

Confirming initial expectations of Cepea, ending stocks of orange juice at processors from São Paulo State should be recovered by the end of the 2017/18 season (June/18), but the levels stored continue to indicate low orange juice supply.

Data from CitrusBR (Brazilian Association of Citrus Exporters) indicate that inventories at Cutrale, Citrosuco and Louis Dreyfus should total only 207.6 thousand tons of frozen concentrate orange juice (FCOJ) Equivalent on June 30, 2018. That amount, however, is 93 % higher than the 107 thousand tons observed at the end of the 2016/17 season.

This increase of inventory is based on crushing forecasts of CitrusBR at 314.47 million boxes, with an average processing yield at 267.33 boxes to produce one ton of FCOJ Equivalent, and sales (domestic and international) at 1.107 million tons of the product. All these items are forecast to recover from the scenario observed last season (2016/17); however, yield should remain at levels below the historical average.

A significant recovery will only be possible due to a large crop in the citrus belt (São Paulo and Triângulo Mineiro), forecast by Fundecitrus (Citrus Defense Fund) at 364.47 million boxes. However, the possibility of replenishments of inventories (greater than 200 thousand tons) in June 2019 will depend, once again, on a large production at the citrus belt in the 2018/19 season. According to Cepea data, if sales, yield and volume from other states continue stable, processors will need to crush around 290 million boxes in 2018/19, meaning a crop in the citrus belt from SP + Triângulo Mineiro similar or greater than 340 million boxes (in natura consumption forecast at 50 million).

The replenishment of inventories at processors from São Paulo is a relief in light of the very low supply in the previous crop, when the Brazilian exportations of FCOJ Equivalent dropped 17 %. Therefore, forecasts for a higher orange juice supply may increase the Brazilian exportations in the 2017/18 season.

DOMESTIC MARKET – Pear orange quotes increased in the domestic market in the first fortnight of August, due to higher demand for the in natura fruit (favored by warmer weather in SP and the return of school classes) and crushing intensification in processors from São Paulo, which gradually reduced the volume available in the market. Between August 1 and 15, pear orange quotes averaged 16.54 BRL per 40.8-kilo box, on tree, 1.4 % up compared to the first fortnight of July (3-14).