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Orange juice crisis causing the world to search for substitute fruits

Sat 01 Jun 2024    
EcoBalance
| 2 min read

The world’s top orange juice manufacturers are confronting a significant supply crisis, prompting them to consider alternative fruits.

A report by Fundecitrus and CitrusBR highlights that Brazilian orange farmers are experiencing their smallest harvest in decades due to the climate crisis and a citrus disease known as greening.

Brazil, the leading global producer and exporter of orange juice, is seeing a severe drop in its output. The report forecasts that the main orange-producing regions of Sao Paulo and Minas Gerais will yield 232.38 million 40.8kg boxes this year, a 24.36% decrease from the previous year.

“Should this production forecast hold true, this will be the second smallest crop since 1988-1989,” it said.

Also read: India cautions against hazardous artificial fruit ripening

Florida, the second-largest global orange juice producer, is also grappling with shortages caused by disease and adverse weather conditions, according to agencies.

Kees Cools, president of the International Fruit and Vegetable Juice Association, described the recent shortage situation as a “crisis.”

“We’ve never seen anything like it, even during the big freezes and big hurricanes,” he said.

In previous years, orange juice providers have avoided long-term shortages by freezing juice, which can be stored for up to two years, according to agencies. However, even the frozen stock is diminishing due to a sustained three-year shortage.

One major issue is citrus greening – an incurable disease spread by plant-feeding insects that render the fruit bitter and eventually kill the tree.

Since its spread in Florida in 2008, citrus greening has wreaked havoc, especially when combined with climate challenges. Over the past 20 years, Florida’s orange juice production has plummeted from 240 million boxes annually to just 17 million, according to Cools.

Manufacturers may need to consider fruits from trees that are more resilient to weather patterns, such as mandarins.

However, this shift would require significant time. Legislative adjustments in the Codex Alimentarius food standards code and the US Food and Drug Administration would have to be considered by the IFU, as reported by agencies.

Manufacturers are likely to become “less reliant” on orange production by increasing the use of other juices like pear, apple, and grape in their blends, according to Harry Campbell, a commodity market data analyst at Mintec, who shared this insight with agencies.

The financial repercussions are already evident. Concentrated orange juice futures soared to $4.92 on New York’s Intercontinental Exchange, nearly double from the previous year. The average price for 16 ounces of orange juice rose from $2.41 in 2019 to $3.41 by the end of 2023, according to Statista.

Francois Sonneville, a senior beverages analyst at Rabobank, told agencies that consumer demand for orange juice has declined by around a fifth over the past year due to rising prices.

“The global orange juice industry is in crisis,” he said.

“The Florida industry has all but disappeared, and Brazilian groves are plagued by disease, rising costs, and unfavorable growing conditions, leaving global orange juice supplies at their lowest point in decades.”

“Until that point is reached where consumers are no longer willing to pay the premium for orange juice because it is at such low supply, prices will continue to drive up,” Campbell told agencies.

The International Fruit and Vegetable Juice Association did not immediately respond to a request for comment.

Agencies: Financial Times, The Guardian, CNBC


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