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Citrus greening causes world orange market crisis

Citrus greening disease is widespread in the key centers of orange cultivation and is one of the main factors contributing to a crisis in the global orange market. Average annual growth rates over the last 2 years have been at -7.0%. A reduction of the global orange market volume is expected once again in 2016, with continuous adjustments corresponding to the nature of the product consumption.

Brazil (16,540 thousand tonnes in 2014), China (7,003 thousand tonnes.), and the U.S. (6,680 thousand tonnes) account for a significant amount of orange production, together supplying 45% of total global volume. In turn, the largest plantations of orange trees are located in Florida (the U.S.) and Sao Paulo (Brazil). Unfortunately, citrus greening has already stricken these territories, which has affected production volume. From 2010 to 2014, average annual rates of orange production growth amounted to -2.8% both in Brazil and the U.S. China, in contrast, showed positive dynamics, with positive + 4.8% growth over the same period.

While global consumption of concentrated orange juice experienced a significant decline, the demand for fresh oranges decreased slightly. From 2010 to 2014, almost all countries observed negative average annual growth rates of per capita consumption value (around 2%), except China. In 2014, the average per capita consumption rate of fresh oranges in China amounted to 4.5 kg/person per year, which was considerably less than in the leading countries. This means that there is an opportunity for growth of fresh produce consumption in China. Demand is increasing, fueled by the growth of urban population and the standard of living.

The top 10 countries in terms of consumption of fresh oranges include the countries which grow oranges themselves. The first place is taken by Brazil, with 26.4 kg of fresh oranges consumed per person per year. This is the lowest value recorded over the analyzed period; however, it still far exceeds the global average value, which is no greater than 5 kg/person.

Large countries without their own extensive plantations of orange trees, that have to import the product, are not on this list. Spain (24.7% in 2014), South Africa (17.3%), and Egypt (17.0%) are the suppliers of fresh oranges in this case. Netherlands (8.7%), Russia (8.0%), France (7.7%), Germany (7.2%), and other countries comprise the countries of destination. In 2014, 6,624 thousand tonnes of fresh oranges were exported overall, 5% less y/y. However, a drop in the volume of supplies did not begin until 2014, before that, it was preceded by growth. Reduction of fresh orange trade volume in 2014 can be attributed to weaker demand caused by the crisis in the economies of countries of destination. In addition, Russia introduced a ban on imports of fruits from the EU countries in 2014, and a ban on supply of oranges from Turkey at the end of 2015, which also affected trade volumes. However, this decline in fresh orange trade in 2014 was caused by political and economic reasons, not the weather or tree diseases.

Orange industry in the U.S. and Brazil is in crisis, as yield perishes because of a spreading “citrus greening” disease, which affects the volume of processing, and has a direct impact on the global concentrated juice market. The share of products supplied for processing decreases as a result, same as the consumption of fresh products, both in Brazil and in the U.S. The reduction in consumption of fresh oranges also occurs among countries importing products from the Mediterranean region and South Africa. However, in this case, this is caused primarily by political and economic factors.

While the orange market around the world is experiencing difficulties, China displays positive dynamics. The country is increasing production of oranges and concentrate, and per capita consumption of fresh produce is growing. For now, China’s orange industry supplies its products mainly to the domestic market, but it is possible that China may increase its presence in the global market, replacing American products.


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