The Expana Benchmark Price (EBP) for EU orange juice concentrate reached $6550/MT on the 28th of June, up 112% year over year, driven by the prospects of low orange production in Brazil and consequently limited global orange juice availability. On May 10, 2024, Fundecitrus, an association supported by citrus growers and juice industries in São Paulo, released its crop forecast for the 2024-2025 São Paulo and West-Southwest Minas Gerais citrus belt. The report projects a production of 232.38 million boxes (40.8 kg each), marking a 24.36% decrease from the previous season's 307.22 million boxes. This forecasted production would be the second-smallest crop for the region since 1988-1989. The greening disease and adverse climatic conditions, including a severe heatwave in September 2023, have significantly impacted the crop, leading to water stress, a high rate of fruit drop, and smaller fruit sizes.
Brazil, which supplies over 75% of the world's orange juice, has almost zero orange juice stocks left. Buyers are only willing to commit to short-term contracts due to volatile pricing, while producers are uncertain about their production capabilities.
European manufacturers are trying to minimize exposure to orange juice by reducing its use in blends, and some have even stopped selling it due to limited availability. There is even talk within the industry that some juice manufacturers are looking to substitute orange juice with mandarin juice. Global consumption of orange juice for the remainder of this year is expected to continue declining, as the supply situation appears increasingly unfavourable and retail prices rise, as older, cheaper contracts phase out. According to market players, demand will have to decline further for prices to stabilize, although the exact level of this equilibrium remains uncertain.
Source: mintecglobal.com