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Orange prices increased in the Brazilian in natura market in the first fortnight of February. According to Cepea collaborators, frequent rains in the citrus belt (São Paulo State) favoured the quality (majorly the size) of oranges, making them suitable for sale in the in natura segment and allowing farmers to raise asking prices. Besides, rainfall also hampered the harvesting, limiting supply. In that scenario, values remained firm.

Usually, orange availability is not high in February – a month that may even be considered offseason –, however, as the 2021/22 season is late, supply is currently higher. Still, there is not an orange surplus in the domestic market, since processing at industries has been faster than usual this month.

So far, the number of early varieties to be harvested is not high – activities are expected to step up only from March onwards. However, supply may be constrained by the low flower set in the first blooming. Thus, the oranges currently available in the in natura market are mostly late varieties and pear oranges out of the ideal period.

TAHITI LIME – The production of tahiti lime is also being favoured by rains, however, farmers reported difficulties to harvest the fruits, which underpinned prices in the first fortnight of February, although it is currently the peak of harvest for tahiti lime in Brazil.

Despite the recent valuations for oranges and tahiti lime, Cepea collaborators have reported that the current economic scenario in Brazil is still constraining higher price rises. With high unemployment and inflation rates and lower income, the purchase power of many consumers is weak.

ESTIMATES – Although rains have favoured the quality of part of the fruits in orchards, they have not been enough to reverse all the damages caused by the drought to the oranges from the 2021/22 season.

According to data from Fundecitrus released on Feb. 10, the orange output (São Paulo + Triângulo Mineiro) in the 2021/22 season is still estimated at 264.14 million boxes of 40.8 kilograms, the same as that estimated in December, but 10 % below that forecast at the beginning of the season.

According to Somar/Climatempo (weather forecast agency), rainfall in SP between May/21 and Jan/22 was 25 % below the average for the period. In the Triângulo Mineiro, rains were 5 % higher than the average. Thus, orange growth was hampered, and the average fruit weight decreased. However, it is important to consider that the oranges harvested in February and in March 2022 are expected to be slightly larger, since they have been favoured by recent rains.

The volume harvested is still enough to replenish ending stocks at the processing plants in SP. According to CitrusBR, by the end of the 2021/22 season (in June 2022), the volume of Frozen Concentrate Orange Juice (Equivalent) stocked is expected to total 170 – 190 thousand tons, lower than the strategic level (250 thousand tons). It is important to consider that new estimates are supposed to be released until the end of February.

In this scenario, the harvest in 2022/23 needs to be large enough to raise stocks at least to the strategic level and thus prevent a world shortage of orange juice. Cepea calculations show that the orange output next season needs to total, at least, 330 million boxes in order to raise juice stocks to 250 thousand tons.

PROGRESS OF THE 2021/22 HARVESTING – According to Fundecitrus’ report, 82 % of the orange orchards had been harvested by mid-January/22, similar to that in the same period last season (81 %).

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 %.

The heavy rains that hit São Paulo State in the first fortnight of February did not result in losses in orange groves, but reduced sales and hampered activities in the field. It is worth to mention that the harvesting pace is usually a lot slower in the first quarter of the year and that many of the fruits available in the market in the first half of the month had undesirable features, such as larger size, thick peel and were beginning to crystalize.

According to Fundecitrus (Citrus Defense Fund), the harvesting of the current crop is ending in the Brazilian citrus belt (São Paulo and Triângulo Mineiro), having reached 96 % of the area, on average, for all varieties. In pera rio groves, 97 % of the oranges have been harvested, for valencia and folha murcha, 95 %, and for natal, 93 %.

Despite the lower quality in the current off-season period, precipitation should not reduce the output in the 2019/20 crop, but underpin prices in the in natura market – as supply is low, the demand for higher quality oranges should be firm. Between February 3 and 14, pear orange prices averaged 32.68 BRL per 40.8-kilo box, on tree, 10.8 % up compared to that in the first half of January.

FUNDECITRUS – On February 11, Fundecitrus released their third estimates for the current season (2019/20). According to the report, the output should total 384.87 million 40.8-kilo box, 0.11 % down compared to that forecast in December/19 and 1.03 % lower than the first crop estimates, released in May/19.

According to the report, the rain volume between May/19 and Jan/20 was lower than the historical average in almost all producing regions (except in northern and northwestern SP), which limited growth, primarily for the varieties hamlin, westin, rubi, folha murch and natal. In general, the oranges have reached different sizes among the producing regions in the citrus belt, due to irregular rains.

TAHITI LIME – The rainy weather in São Paulo in the first fortnight of February hampered field activities and helped to control supply (it is worth to mention that, currently, tahiti lime is at crop peak). Still, on the average of the period, tahiti lime prices dropped 18.2 % compared to that in the same period of January, averaging 11.65 BRL per 27-kilo box, harvested, in the first half of February.

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.