As one of the globe's largest orange juice exporters, Brazil has influenced a marked reduction in orange juice prices, with futures decreasing by 50% this year. In January, frozen concentrated orange juice (FCOJ) contracts reached a peak of $5.1465 per pound on the New York exchange, later trading at $2.6210. They hit a low of $2.4290 on March 18. Over the last year, prices have dropped by 28.7%, as reported by Valor Data.
The decline is linked to anticipated improvements in Brazil's orange crop for the 2025/26 season, starting in May. The prior harvest produced 228.52 million boxes, hindered by drought conditions. Andrés Padilha, a senior analyst at Rabobank Brazil, noted estimates ranging from 260 to 300 million boxes, potentially increasing by 30% from previous levels. The USDA's Brasília office projected even higher, at 320 million boxes.
Padilha acknowledged the USDA's forecast as optimistic but possible. He highlighted factors such as increased grower investment in orchards despite stagnant planted areas and rising greening cases. "Temperatures are climbing year after year, and while rainfall has improved recently, I'm still doubtful we'll reach 320 million boxes," he stated.
Market expectations hinge on milder climate forecasts and official harvest estimates from Fundecitrus due in May. Padilha suggested that a harvest closer to 260 million boxes might drive prices up, while a figure above 300 million could lead to further price drops.
Despite declining prices, global demand remains subdued. CitrusBR, representing major Brazilian juice exporters, noted that consumer demand might not rebound swiftly. "The transition from futures prices to the consumer market doesn't happen quickly," Padilha remarked.
Source: Agribusiness