The 2022/23 orange crop from Florida is expected to total 28 million boxes of 40.8 kilograms each, the lowest since 1935/36 and 32 % down from that last season, according to the estimates from the USDA.

However, the damages caused by hurricane Ian have not been considered yet. Thus, the recent report has concerned the agents in the citrus sector. The USDA’s next estimates are supposed to be released on Nov. 9th, however, the damages caused by hurricane Ian are not expected to be considered in that report yet, which is supposed to happen in the December’s report.

Thus, local agents believe Florida’s production will be at least 40 % lower than that forecast by the USDA. In 2017/18, when Florida was last hit by a hurricane (Irma), production decreased by 34.6 %, and agents agree that Ian was more destructive than Irma. Besides the damages caused to crops, warehouses and equipment were destroyed too.

In this context, the United States’ necessity of importing orange juice – which was already growing up – is expected to increase even more, which may raise Brazilian juice exports to the country. However, it is important to consider that supply has been low in Brazil, where ending stocks are forecast to be lower than the strategic level (of 250 thousand tons). In August, CitrusBR estimated the ending stocks in the 2022/23 Brazilian season (by June 2023) to total 140 thousand tons, considering higher exports to the USA – however, this increase did not consider the effects of hurricane Ian on Florida crops and production.

So far, imports are following opposite trends in the US, depending on the type of juice: for Not From Concentrate juice (NFC), imports are rising, while for Frozen Concentrate Orange Juice (FCOJ), they are fading. According to Florida’s Citrus Department, from October/21 to August/22, the US imported 9 % less FCOJ than that in the same period of the previous season; however, the imports of NFC juice increased by 43.9 %. On the other hand, ending stocks of both types decreased: 39.5 % for FCOJ and 25.3 % for NFC juice.

Brazil is the US’s major juice supplier. Considering FCOJ, 50.1 % of the total imported by the US in 2021/22 came from Brazil, which was followed by Mexico (42.4 %). Considering NFC juice, 78.6 % of the total imported came from Brazil, against 20.5 % from Mexico.

BRAZILIAN MARKET – The demand for oranges was low in the Brazilian market in the first fortnight of October. According to Cepea collaborators, the unstable weather (with rains and periods of lower temperatures) and the holiday on October 12 constrained consumption. Still, prices remained firm, majorly underpinned by the supply in the in natura market, which is being controlled. For tahiti lime, values faded, due to lower demand. But still, they continued at high levels.

The prices for Frozen Concentrate Orange Juice (FCOJ) Equivalent rose high at ICE Futures in the first fortnight of April, reflecting the current low world supply, majorly in Brazil and in Florida (USA). Between April 1st and 13, the May/22 contract for orange juice increased by 20 %, and in 2022, by more than 30 %, closing at USD 2,650/ton on April 13.

Indeed, orange production (and juice production) in the Brazilian citrus belt (São Paulo State and the Triângulo Mineiro) decreased in the 2021/22 crop, which is practically over. According to a report released by Fundecitrus in the first half of April, the Brazilian citrus belt is expected to harvest 262.97 million boxes (40.8-kilograms) of oranges, 10.6 % down from the first estimates (May/21) and 2.2 % lower than that in the previous season.

This context will influence the Brazilian supply of orange juice, since the citrus belt is the major orange-producing region in Brazil. In February, Citrus BR estimated that, by the end of the season (in June 2022), the national stocks of orange juice (forecast at 127 thousand tons) will not be enough to ensure the world supply until the new crop (2022/23) steps up.

The same scenario is observed in Florida, where production estimates were revised down by the USDA by 19 % compared to the expected in Oct/21, to 38.2 million boxes, 28 % lower than that last season.

Lower production in the current and in previous seasons is reflecting on local stocks. According to the Florida Department of Citrus, from the beginning of the 2021/22 crop, in Oct/21, to March 26, 2022, the stocks of FCOJ were 31 % lower than that in the same period of the previous season. For not-from-concentrate orange juice, stocks were 25 % lower.

In this context, although the United States did not increase imports of concentrated orange juice – which decreased by 4.6 % between Oct/21 and Jan/22, according to the Florida Department of Citrus –, they increased purchases of not-from-concentrate orange juice. Brazil supplied 85 % of all the not-from-concentrate orange juice and 71 % of the FCOJ imported by the USA.

These estimates for Brazil and the USA explain the recent valuations of orange juice at ICE Futures. In both countries, supply is not expected to recover in the coming season (2022/23).

In the Brazilian citrus belt, although orange production may increase slightly, a higher harvest would not be enough to raise stocks and ensure world supply, since the current volume stocked is very low. In Florida, with the high incidence of greening on orchards (which has been lowering the average productivity of orange trees) and the smaller area with orange orchards in the state in the last years, production is not expected to return to the levels observed in previous decades.

Orange juice (volume equivalent to concentrate juice) exports finished the 2020/21 season downing 7 % compared to the previous (2019/20). From July 2020 to June 2021, shipments to all destinations totaled 1.03 million tons, according to Secex. The revenue, in turn, amounted 1.54 billion USD, for a decrease of 15 % in relation to the season before.

The low performance is related to the smaller orange supply in the Brazilian citrus belt (São Paulo and Triângulo Mineiro), but players from the industry say that international prices (in USD) were not very high. On the average of the season, prices of the concentrate juice (which accounts for most of the revenue obtained) were 11 % lower, according to Secex. On the other hand, NFC (not-from-concentrate) values were 8 % higher in the same comparison. It is important to mention that the dollar valuation favored the revenue in Real (BRL).

The decrease was mostly influenced by the European Union, a major purchaser of the Brazilian product: it imported 649.95 thousand tons, 13 % down compared to the season before. The revenue was 982.86 million USD, for a decrease of 20 % in the same comparison.

Exports to the United States, in turn, increased. In general, besides consecutive reductions in the orange production in Florida (limiting local inventories), the pandemic scenario has favoured the demand in some periods, due to the healthy aspect of consuming the product. Shipments totaled 198.34 thousand tons in the 2020/21 season, 13 % up compared to the previous. The revenue rose 7 %, totaling 297.53 million USD.

As for the 2021/22 season, which starts in July, Brazilian exports may again be limited due to smaller orange production and low pace of consumption. However, the economic recovery is likely to favour sales.

The Brazilian orange crop for Marketing Year (MY) 2020/21 is forecast at 390.8 million 40.8-kg boxes (MBx) or 15.94 million metric tons (mmt), an increase of seven percent relative to the current season. Although citrus trees are in the on-year of the production cycle, adverse weather notably affected the production potential for the upcoming season. Total Brazilian FCOJ 65 Brix equivalent exports for MY 2020/21 are forecast relatively stable at 1.050 million metric tons (mt), an increase of 18,000 mt vis-à- vis MY 2019/20 …

Please download the full report: www.nass.usda.gov

The Brazilian orange crop for Marketing Year (MY) 2020/21 is forecast at 415 million 40.8-kg boxes (MBx), equal to 16.93 million metric tons (mmt), an increase of 14 percent relative to the current season. The forecast assumes normal weather conditions will prevail as of mid-December 2020 to support fruit setting and development of the second blossoming in the Sao Paulo and Minas Gerais commercial citrus belt. The current orange crop estimate in the Sao Paulo and Minas Gerais citrus belt was revised downward from 287.8 to 269.4 MBx (11.74 mmt to 10.99 mmt) as a consequence of the lack of rain fall and high temperatures between September and October. Total Brazilian FCOJ 65 Brix equivalent exports for MY 2020/21 are forecast at 1.08 mmt, similar to revised figure for MY 2019/20 …

Please download the full citrus crop production forecast: www.nass.usda.gov

As orange production is higher this season (2019/20), orange juice inventories should increase again until the end of the crop. According to a report from CitrusBR (Brazilian Association of Citrus Exporters) released on February 18, ending stocks of Frozen Concentrate Orange Juice (FCOJ) equivalent should total 412.83 thousand tons at the processing plants from São Paulo by June 30, 2020. This is the highest volume registered in five seasons (since 2014/15), considering CitrusBR’s historical series.

If this volume is confirmed, it would account for a 63 % increase compared to that in the 2018/19 season (253.18 thousand tons). This scenario was already expected, since orange production in the citrus belt (São Paulo and the Triângulo Mineiro) increased 34.6 % between the last season and the current one, according to Fundecitrus (Citrus Defense Fund).

Of the total volume produced, still according to CitrusBR, 59.7 million boxes (40.8-kilo box) will be allocated to the in natura market and 325.17 million, to processing. The average crop yield is estimated at 270.1 boxes for a ton of FCOJ Equivalent, and the total juice production is forecast at 1.2 million tons.

In August/19, Cepea calculations had pointed to the possibility of inventories to increase at processors to levels similar to that estimated by CitrusBR, at 400 thousand tons.

REFLEXES IN 2020/21 – Although estimates point to a recovery in the volume stocked (the last four seasons closed with lower volumes), the effects on juice inventories in 2020/21 will depend on the amount to be produced in the coming season. However, since citrus growers expect next crop to be at least 30% smaller than the 2019/20, inventories should decrease to lower levels in June/21.

If production decreases, the prices paid to growers by the industry may rise, since demand should remain firm in this segment, despite the high inventories. In the in natura market, quotes may be favored by low supply, since processors should try to purchase the largest possible amount of fruits, to prevent inventories from decreasing to critical levels in June/2021.

MARKET IN FEBRUARY – Orange consumption decreased in the in natura market in the second fortnight of February, due to the rainy weather in some regions of São Paulo State and fruits’ lower quality. However, the low supply of higher quality pear oranges underpinned prices during the month. Between February 3 and 28, pear orange prices averaged 33.06 BRL per 40.8-kilo box, on tree, 8.3 % up compared to that in January.

TAHITI LIME – The harvesting pace for tahiti lime was fast in February in the major producing regions from São Paulo State. Supply, which has been increasing since December, hit its peak last month, and according to agents consulted by Cepea, it may continue high until late March.

Besides that, rains influenced the in natura market too, hampering activities in the field and lowering fruits quality. Moreover, the sales pace was slow in February, due to the carnival season in Brazil.

Thus, in February, tahiti lime quotes averaged 10.24 BRL per 27-kilo box, harvested, the lowest for the month since 2017, in nominal terms, and 14.9 % down compared to that in January.

Brazilian exports of Frozen Concentrate Orange Juice (FCOJ) Equivalent decreased 19 % in the 2018/19 crop – compared to the previous season), as expected. Between July/18 and June/19, shipments totaled only 982.24 thousand tons, according to Secex. As for the revenue, it totaled 1.8 billion USD, 19 % down in the same comparison.

The volume exported from Brazil in the 18/19 season was the second smallest in the last 20 years of Secex historical series, only larger than that from 2016/17, when the Brazilian citrus belt harvested a small crop – which, in turn, resulted in the lowest inventory of all times, according to data from CitrusBR (Brazilian Association of Citrus Exporters).

The bad performance in 2018/19 was linked to two factors: lower orange supply in the Brazilian citrus belt (São Paulo and Triângulo Mineiro) and a decrease in the international demand, mainly from the United States. Lower exports, however, prevented juice inventories at Brazilian processing plants from decreasing to critical levels at the end of the season (June 30 2019).

According to a report from CitrusBR, in June/19, inventories at Brazilian processing plants closed at only 224.51 thousand tons, which is considered low compared to that in recent years – inventories in June/19 were only lower than in 2010/11 and in 2016/17.

Brazilian shipments to the United States decreased a steep 38 % compared to that last season, totaling only 196.4 thousand tons. Revenue, in turn, dropped 39 %, to 340.96 million USD. Besides lower consumption in America, this result is linked to expectations for a crop recovery in Florida in 2018/19. According to a report from the USDA released today, July 11th, Florida should harvest 71.6 million boxes of 40.8 kilos, 59 % more than in 2017/18.

To the European Union, the biggest importer of the Brazilian orange juice, shipments totaled 643.74 thousand tons, 11% down compared to that last season. Revenue, in turn, reached 1.19 billion USD, 9 % down in the same comparison.

BRAZILIAN MARKET IN JULY – The cold weather in São Paulo State reduced citrus consumption in the first fortnight of July. According to Cepea collaborators, despite the occasional frosts in some producing regions (mainly in southwestern SP), there were no losses at orchards. Between July 1 and 15, pear orange prices averaged 18.07 BRL per 40.8-kilo box, on tree, stable (-0.05 %) compared to that between June 1 and 15.

Concerning tahiti lime, besides lower supply (due to the harvesting end for the fruits produced in the first semester of 2019), rains pushed up quotes in the first half of July. Between July 1 and 15, tahiti lime quotes averaged 25.19 BRL per 27-kilo box, harvested, a staggering 84.5 % up compared to that in the same period of the previous month.

The Brazilian exports of Frozen Concentrate Orange Juice (FCOJ) Equivalent in the 2018/19 season are ending and the volume shipped to all destinations is still low – May was the ninth consecutive month of lower sales (this scenario has been observed since September/18).

This scenario, which was already expected by agents, is linked to the lower orange production in the Brazilian citrus belt (São Paulo and Triângulo Mineiro) this season as well as lower demand from the international market, mainly the United States. The exports decrease, in turn, prevents orange inventories of Brazilian processing plants from decreasing to critical levels by the end of the season (June 30 2019).

This season (July/18 to May/19), Brazilian juice exports to all destinations have decreased 18 % compared to the same period in the 2017/18 season, totaling 918.46 thousand tons, according to Secex. Revenue, in turn, has dropped 17%, totaling 1.69 billion USD.

Exports to the European Union, the biggest purchaser of the Brazilian juice, totaled 592 thousand tons, 8 % down compared to that in the same period last year. Revenue, in turn, totaled 1.09 billion USD, 6 % down in the same comparison.

Shipments to the United States had the steepest decrease in the season, of 38 % compared to the previous crop, totaling 190.71 thousand tons of juice. This result is linked to the lower demand from the USA, due to the estimates for the recovery of the 2018/19 crop from Florida as well as lower consumption. Revenue, in turn, dropped 39 % in the same comparison, totaling 331.55 million USD.

ESTIMATES – According to a report released by the USDA on June 11, the orange crop from Florida should increase by 58.4 % compared to the previous, totaling 71.4 million boxes (1.3 % down compared to that forecast in May).

Despite the decrease in the consumption of orange juice in the United States, the demand from the country for the Brazilian orange juice may not decrease too sharply in the coming seasons, due to the effects of greening on American crops in the long term.

BRAZILIAN MARKET – The trading pace was slow in the Brazilian citrus market in the first fortnight of June. However, the volume of oranges in the ideal stage for the in natura market was gradually decreasing in São Paulo, due to the increase in the deliveries to processing plants. Thus, between June 3 and 14, pear orange quotes averaged 18.08 BRL per 40.8-kilo box, on tree, 21.5 % down compared to that in the first half of May.

As for tahiti lime, despite the large volume available for harvesting, the current weather allows the fruits to stay on tree for longer. Thus, growers reduced the pace of activities in the field, aiming to prevent prices from dropping too much. In the first half of June, tahiti lime quotes averaged 13.65 BRL per 27-kilo box, harvested, a slight 20.6 % down compared to that in the first fortnight of May.

EXPORTS – Lemon and lime shipments were positive in May, surpassing, for the first time in the year, the amount exported in 2018. Last month, exports hit a record (revenue and volume) in all Secex series, which started in 1997.

According to Brazilian exporters consulted by Cepea, as the weather delayed the maturation of tahiti lime crops in SP, shipments decreased from March to April, increasing again in May. According to data from Secex, Brazil exported 18.94 thousand tons of lemon and lime in May, almost two-fold the amount shipped in May 2018 and 57% more than that exported in April/19.