Prices of oranges to the industry dropped significantly in late February, due to the low quality of fruits and to international decreases of orange juice quotations. From February 24-27, for instance, the price average was at BRL 74.29 per 40.8-kilo box, downing 6.55 % compared to that in the week before and 16 % in February.

Players surveyed by Cepea say that the orange quality has reduced since the beginning of the year, with lower brix-acid ratio compared to what is desirable for processing activities, and this has been affecting the quality of the orange juice.

This scenario of low quality, in turn, is related to the fact that the 2024/25 had registered several blossoming cycles, resulting in the harvest of distinct stages of fruits (ripe and unripe), which affects the standardisation of oranges sent to processing activities.

Impacts on export

The lower orange supply and the limited quality of the fruits have been limiting orange juice shipments. According to data from Comex Stat, exports of not-from-concentrate (NFC) OJ (NCM 20091200) have presented a lower performance compared to that verified in the season before. In the partial of the 2024/25 crop (from July/24 to January/25), the volume of juice shipped by Brazil totaled 1.09 million tons, 3.4 % smaller than in the same period last season.

Tahiti lime shipments

Brazilian exports of tahiti lime continue moving at a good pace, after reaching a record volume in 2024. In January, Brazil shipped 17.15 thousand tons of tahiti lime, a record for the month and 18.1 % up compared to January/24 – data from Secex. Revenue totaled USD 14.826 million, for an increase of 13.4 % in the same comparison.

The Indian soft drinks sector is currently experiencing a notable disruption due to the price war initiated by Campa Cola. With the incumbent market leaders, Coca-Cola and PepsiCo joining the price war, it is an all-or-nothing war for a share of the consumer’s wallet in the Indian soft drinks sector, says GlobalData, a leading data and analytics company.

Parthasaradhi Reddy Bokkala, Lead Consumer Analyst at GlobalData, comments: “The Campa Cola brand, once a common sight across India when Coca-Cola and PepsiCo did not operate in the country due to regulations, was revived in 2022 by Reliance Retail. Backed by the deep pockets of its parent, Reliance Industries, the company embarked on an aggressive pricing model to capture market share.

“With the INR10 (USD 0.12) price of a 200 ml cola bottle and INR 20 (USD 0.24) for a 500 ml bottle, Campa Cola has undercut PepsiCo, Coca-Cola, and other companies’ prices by 50 %, as 200 ml bottles of colas are generally available at a price of INR20 (USD 0.24). To counter this, Coca-Cola and PepsiCo launched promotional pricing for their larger bottles. This led to a lull in the price war as Campa Cola’s distribution reach was still low.”

Francis Gabriel Godad, Consumer Business Development Manager, GlobalData India, notes: “The impact on market leaders Coca-Cola and PepsiCo’s market share was low due to the lack of distribution reach for Campa Cola. Thanks to the gradual increase in Campa Cola’s distribution reach, the situation changed in recent quarters as the aggressive prices and expanded distribution disrupted the operations of Coca-Cola and PepsiCo. The two companies have been forced to withdraw from the status quo and increase promotions on their products. For instance, Coca-Cola recently launched a 350 ml bottle (150 ml free) of its flagship Coca-Cola brand at INR 20 (USD 0.24).”

Godad continues: “The predatory pricing has also affected the volumes of non-cola categories and brands. For instance, PepsiCo’s Tropicana and ITC’s B Natural brands suffered volume losses due to the expanding price differential between nectars and colas.”

Reddy concludes: “The price war in the Indian soft drinks sector is a multifaceted issue driven by aggressive pricing strategies, shifting consumer preferences, economic pressures, and a growing focus on health. As companies continue to adapt to these dynamics, the competition is likely to intensify, with potential long-term implications for brand loyalty and market positioning. With all the major players having deep pockets, the market is in for a long-drawn price war, which can lead to a consolidation in the market, as smaller players may not be able to sustain in a long-drawn price war.”

The cost of plastics, aluminium, paper and liquids materials used in flexible packaging reached new, record levels in the first quarter of 2022, maintaining the strong upward surge in prices seen throughout 2021, according to Flexible Packaging Europe (FPE). Continued pressure from soaring energy costs, as well as other external factors, means the dramatic increases seen in the last half of 2021 have now been exceeded.

In particular the cost of 20micron BOPP film shot up 45 % during January to March 2022 and has now doubled in price since the first quarter of 2021. Thin aluminium converter foil also jumped by 67 % in the same three months and is now 75 % higher than the end of 2020. Elsewhere, 12micron PET added 47 % in the same period to stand 50 % higher than just over a year ago, while 15m micron BOPA film added 33 %, marking a 44 % increase in 15 months.

LDPE and HDPE prices are still well above the price levels seen at the end of 2020, being 75 % and 54 % more. Both are still well above the price levels seen at the end of 2020, being 75 % and 50+ % more. All figures have been complied by Wood Mackenzie and ICIS.

Commenting on the figures, David Buckby, Senior Analyst at Wood Mackenzie said, “Substrate prices across the board continued to rise sharply in Q1, driven primarily, in many cases, by energy surcharges. Limited availability of materials also propped up prices, made worse by ongoing global logistics challenges. The high cost and unpredictability of offshore sourcing means that European producers were generally busy, with some fully booked and not accepting new orders.”

“Lead times for aluminium foil in Q1 were as long as five months compared to two months previously. For paper, they were often two to three months, up from four to six weeks. The extent of price increases from supplier to supplier depended heavily on the scope of previous hikes – timings do vary. Some producers which pushed through substantial energy surcharges and price rises in Q4 pushed for only moderate hikes or even rollovers in Q1,” he added.

“Russia’s invasion of Ukraine added further uncertainty to an already highly clouded outlook,” Buckby believes.

FPE sees continued strong demand for all flexible materials as growth indices for the markets its members serve all remain positive. However there has been a general slowdown in the pace of growth, which may take some pressure off already stretched supply shortages of raw materials and ancillary products, such as adhesives and inks. Logistics and utilities pricing increases had and will continue to have a large effect on conversion costs to flexibles packaging converters. After a brief pause oil prices are now increasing again, so this may weigh on any respite from continued flexible material price hikes.

Guido Aufdemkamp, FPE’s Executive Director thinks it is difficult to forecast the direction of the market in current circumstances. “Growth in demand in Europe for flexible packaging is almost certain. While the price increases could have an impact on the levels of demand this is unlikely as non-flexible packaging applications are faced with higher absolute increases per pack as more material is used. Add the continuing supply chain disruption and major energy issues to the equation and the outlook is uncertain. The conflict in Ukraine and the economic consequences of it across Europe were not something we could predict or anticipate. However flexible packaging producers have proved resilient in the past, most recently with the pandemic, so we are confident the sector will continue to be able to meet demand for its products.”

The Flavors & Fragrances (F&F) business unit of specialty chemicals company LANXESS is increasing prices worldwide for its entire portfolio of preservatives, benzoates, intermediates, aroma chemicals and multifunctionals with immediate effect. Customers will be contacted individually regarding the specifics of the measure as it applies to their products or regions.

The reasons for the adjustments are, in particular, unprecedented challenges with a significant impact on logistics and production. Fragile supply chains, dramatically increased raw material and energy costs – not least as a result of the war in Ukraine with oil and gas prices at record levels – bring significant consequences for the entire supply chain.

Offerings from F&F are primarily used to provide flavour, fragrance, shelf life and essential performance characteristics in a wide variety of consumer products, such as food and beverages.

The return of rains to important citrus-producing regions in São Paulo State (SP) cheered up farmers about flower development. However, it is still early to estimate results for the 2022/23 season, since the set of fruitlets will depend on the weather along October and more flowers may open until the end of the month.

According to data from Inmet (National Institute of Meteorology), rainfall is expected to average 50 mm in most citrus-producing regions in October.

ORANGE MARKET – The trading pace for oranges was slow in the Brazilian market in the first fortnight of October because of the holiday on the 12th. Higher rainfall is expected to improve the quality of the fruits on tree, although they have not reached the ideal standard to be sold yet. This scenario added to low supply pushed up orange prices in that period.

TAHITI LIME – In the market of tahiti lime, prices faded in the first half of October, reflecting the small size of the fruits available, which is not appreciated in the in natura market. In the second week of the month, values increased slightly, influenced by higher demand during the holiday (on the 12th), which surprised farmers.

ORANGE JUICE EXPORTS – The Brazilian exports of orange juice are on the rise in the current season (2021/22). According to data from Secex (Foreign Trade Secretariat), between July and September, Brazil exported 278.9 thousand tons of Frozen Concentrate Orange Juice (FCOJ) Equivalent to all destinations, 19 % up from that in the same period last season. Revenue increased more sharply, by 32 %, reflecting the higher prices paid for the product, totaling USD 440.8 million. Of the total volume shipped this season, 20 % were sent to the United States – the volume exported to the USA has increased by 33 %, and the revenue received from the country, by 51 %.

There is a saying among those who have been in the industry for a long time: “there is no harvest like the other”. The current one is overcoming itself; such are the difficulties faced.

The first signs that the season would be different were given by last year’s bloom. Blooming in August and September 2019 was very good. However, a period with no rain in the following months accompanied by intense heat has caused an expressive fruitlet fall. The fruits developed until a 2-3 cm diameter size but were overturned by excessive heat. Rains came up in the end of October and a new flowering is expected.

The harvest season was preceded by the arrival of the COVID-19 pandemic. The great demand for labor, much of it coming from northeastern states in the country, concerned everyone and made us take extraordinary care to preserve the health of workers involved in the harvest and of other collaborators from other sectors of the properties.

Thus, the current harvest has been one of great surprises and has presented unusual challenges to citrus growers of the Brazilian citrus belt. The main consequences are presented below.

The period without rain, from May of this year until this last month of October, was one of the most extensive ever recorded in the state of São Paulo, according to the graphs and tables below. In addition to drought, very high maximum temperatures were recorded, even at night, causing considerable weight loss and lower fruit quality. The water deficit was very significant in all regions. This is the main reason for the significant decrease in the volume of fruit produced in the “citrus belt”. The losses are more accentuated in the north of the state of São Paulo and in the Triângulo Mineiro, warmer and drier regions.

1. However, even further south in the state, losses were above normal. The first harvest estimate released by Fundecitrus, last May, brought an amount of 287.8 million boxes, 25% less than the previous harvest (2019/2020). What you see in the field is a volume of oranges quite below that number. The common perception among consulted technicians and citrus growers is that the final figure is expected to be below 250 million, perhaps below that.
2. The period without rain and with temperatures well above the average resulted in extremely withered orchards – plants even died in orchards without irrigation. Another aggravating factor this year was the scarcity of water for irrigation. There are properties that have an installed irrigation structure; however, they do not have enough water available to meet the needs of the plants.
3. Due to the flowering in non-traditional months (December and January) there are a large number of “green”, not yet ripe fruits mixed with ripe fruits from the normal flowering (August-September 2019). This brings an additional difficulty to the harvesting operation that has to be carried out in at least two different times, resulting in an increase of the production cost for the citrus growers.
4. This mix of fruits with different level of ripeness, impair the quality of the juices, especially due to the greater amount of limonin present in the green peels of oranges. On the other hand, in the northern regions of the citrus belt, the fruits are getting ripe much faster than normal, producing juices with a ratio (ratio between the amount of sugars divided to acidity) much higher than the average for the period of the year. Industrial income has been better this year than in the previous two years, at least until this time of the harvest (November 2020).
5. As a further consequence of this year’s climate events, we will see an increase in the effects of HLB or greening. The symptoms of the disease, such as early fruit fall and low production, usually express themselves more strongly when there is a water deficit. In addition, the psilideo, vector of the disease, presented very high rates even in winter, indicating that we will have a greater number of infected plants in the next years. This has probably occurred because of the warmer climate which resulted in a very irregular or uneven plant vegetation.

What can we expect from the next crop?

The northernmost regions only flourished after the rains that fell in the last days of October. This late blooming should not have a good fruit set because they will be still small in the higher summer temperatures. Moreover, the loss of leaves was very great in the recent drought period, and this will not allow for a large amount of fruit for the next season, since the plant will not be able to provide the metabolites necessary for an expressive fruit set. A good 21/22 harvest is not to be expected for these regions.

In the most southern regions, which suffered less from water deficit, the flowering came in the normal period, between August and September. However, irregular rainfall and high winter temperatures (table 2), after flowering, have worried producers. What they see in their orchards does not indicate a good harvest for the second year in a row. My experience shows that the harvest after a year as irregular as this one is also not usually good.

Price of juice should go up

Although it is common for citrus to have alternate crops, i.e., smaller crops followed by larger crops, the climatic factors presented in this article should result in two “small” crops in a row, the current and the next seasons.

Thus, Brazilian orange juice industries should process fewer oranges for two consecutive years. This reduction in supply, combined with the growing demand for juices in times of pandemic, should cause increases in the price of juices on the international market.

Author:
Mauricio Mendes
Citrus Consultant
Agriplanning Brazilian Agribusiness Company
GCONCI (Citrus Consultant Group)

Mauricio Mendes is a citrus consultant sine 1980 and Citrus grower since 1988. Has worked to major Citrus Farms in Brazil. Is COO of a 6.000 ha Citrus Farms operation in the SW od Sao Paulo State. Mauricio is also Beachead Advisor for New Zealand Trade and Enterprise (NZTE) . Also has been partner and CEO, for 14 years, of Informa FNP which is one of the most important Agribusiness consultant company in Brazil. FNP was recently acquired by IHS Markit.
Mauricio is also member of GCONCI (Citrus Farming Consultants Group) which gathers 17 Consultants. GCONCI provide direct technical assistance to over 40 million citrus plants (25 % of the Brazilian Citrus Belt)

^*Araraquara and Itapetininga are major production citrus regions in São Paulo State.

Tate & Lyle, a leading global provider of food and beverage ingredients and solutions, announces that effective October 1, 2019 or as contracts allow, the Food & Beverage Solutions business in North America will implement price increases of up to 12 % on specialty food starches, fibres, specialty and high intensity sweeteners, and stabilization and functional systems.

These adjustments are required following increase in costs to produce the affected products.

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.

After decreasing in the first fortnight of March, tahiti lime supply increased in the second half of the month in São Paulo State. Although the crop peak has already finished, harvesting of the fruits from the second flowering event increased the volume available in the in natura market. According to agents consulted by Cepea, this second crop had a satisfactory development, due to humid weather in the first months of the year, but supply should not surpass that in the first bimester.

Cepea collaborators estimate the second crop harvesting to step up in April, since the maturation stage of the fruits allowed them to stay on trees last month. Thus, farmers slowed down the harvesting pace in order to avoid significant price losses.

In April, therefore, higher availability may press down quotes if the demand from processors, which was firm in the first quarter of the year, starts to move down. So far, purchases from processors have controlled supply in the in natura market. In March, the average tahiti lime price, at 13.86 BRL per 27-kilo box, harvested, was 2.7% above that in February, crop peak period in São Paulo.

Exportations

Tahiti lime shipments were slow in March, according to exporters. Besides the low price levels in the international market, record amounts of the fruit were sent to the European Union in the first bimester, according to Secex.
In the first two months of 2018, exportations totaled 20.9 thousand tons, 14.3% higher than in the same period last crop and a record for the season, according to Secex. In March, however, the cold weather in Europe (the world’s biggest tahiti lime importer) weakened consumption.

Brazilian market

Low supply of good quality fruits pushed up quotes of early pear oranges, as well as of late oranges, from the 2017/18 season – scenario observed since the second fortnight of February. In March, pear orange prices averaged 29.02 BRL per 40.8-kilo box, on tree, 28.9% up compared to that in February.