Global market for orange juice in disarray

The setting for the orange juice is even worse than expected earlier this year. The world market shrinks and Brazil exports less. The prices, however, rise. Lower industrial output Orange in Brazil, the world’s largest producer, and the decrease in the harvest of Florida due to disease in the orange groves, led the USDA (United States Department of Agriculture) to reduce the estimate of orange juice production to 1, 6 million tonnes in the period 2015/16.

The new estimate indicates a volume 11% lower than forecast last January, when the US agency estimated world production of 1.8 million tons. The drop in consumption of the drink is making Brazil the orchards and the United States deem space to other cultures or construction projects. Thus, the global product supply drops quickly. In 2011/12, the industries put 2.2 million tons of juice market, according to the USDA. The biggest falls in the drink production occur in leaders: Brazil and the United States.

As the numbers of Americans, the Brazilian production of juice was 1.3 million tons in 2011/12; It fell to 1 million in 2014/15 and will be in just 885,000 in 2015/16. In the United States, the drop has been even higher. After having put 629,000 tons of juice on the market in 2011/12, US industries have cut production to 438,000 last season and to 383,000 in this. Global consumption also drops, but is higher than production for the second consecutive year. 1.8 million tons will be consumed in this harvest, down from 2 million 2014/15. European Union and United States will be the main drivers of this reduction.

With the new deficit between production and consumption, world ending stocks in the harvest only 485,000 tons, 328,000 of them in the United States. World leader in exports, Brazil will put 885,000 tons in the foreign market, up from 1.13 million in the previous harvest. Leader in imports, the European Union will buy only 705,000 tons, and the United States, 280,000. Both import 15% less in the year.

The first orange juice contract negotiated this Wednesday (20) on the New York Commodity Exchange closed at US $ 1.80 per pound, 54% more than a year ago.