In Brazil, the orange market is experiencing unprecedented price levels, with the 40.8-kg box surpassing approximately $20 in the natura market. This surge is attributed to robust industry demand amidst dwindling orange juice stocks, coupled with constrained supply due to reduced production volumes. The citrus belt's weather conditions, characterized by dry spells and elevated temperatures, have adversely affected crop development. Despite the lucrative prices for citrus growers, the diminished productivity has escalated costs, further exacerbated by the citrus greening disease, potentially compressing margins in regions with significant production declines.
The Tahiti lime market witnessed fluctuations, with prices dipping in the first half of the year before rallying in the latter part due to the offseason, a typical trend in this segment. The constrained orange supply, alongside heightened industry demand, has propelled prices to record highs, with the industry's average payment for the 40.8-kg box exceeding $18 in October. Notably, the trading season for 2023/24 commenced prematurely in January, with initial quotations around $7.60 per box, escalating rapidly as industry inventories dwindled, culminating in record real-term prices of over $20 per box in November.
Projections for the 2024/25 season in São Paulo state and Triângulo Mineiro indicate a harvest of 223.14 million 40.8-kg boxes of oranges, marking a 3.4% increase from the previous forecast yet representing a 4% decrease from the initial May 2024 estimate. This envisages a 27.4% reduction from the 2023/24 season's harvest, as reported by Fundecitrus, primarily due to adverse weather conditions and the prevalence of citrus greening disease. The current scenario underscores the critical state of orange juice stocks in Brazil, necessitating a production uptick in the forthcoming 2025/26 season to sustain global supply amidst potential benefits and competitive pressures stemming from the Mercosur-EU agreement for citrus exports and imports.
Source: CEPEA